Preamble

The House met at a quarter before Three of the Clock, Mr. SPEAKER in the Chair.

NEW WRIT.

For the borough of Wandsworth (Central Division) in the room of Colonel Harry Louis Nathan (Chiltern Hundreds) —[Sir Charles Edwards].

PRIVATE BUSINESS.

FARNHAM GAS AND ELECTRICITY BILL [Lords].

As amended, considered; to be read the Third time.

Oral Answers to Questions — ITALY (OVERSEAS POSSESSIONS).

Mr. Mander: asked the Under-Secretary of State for Foreign Affairs

(1) whether, in view of the declaration of war by Italy against this country, the British Government any longer feels itself bound to recognise in the future Italian rights in connection with Ethiopia; and whether the Government holds itself free to consider any proposals that may be laid before it in this connection by His Majesty Haile Selassie, or by the Ethiopian people;
(2) whether he will make it clear that, under present conditions, the British Government in no way recognises Italian sovereignty over Albania?

The Under-Secretary of State for Foreign Affairs (Mr. Butler): In view of Italy's unprovoked entry into the war against this country, His Majesty's Government hold themselves entitled to reserve full liberty of action in respect of any undertakings given by them in the past to the Italian Government concerning the Mediterranean, North or East African and Middle Eastern areas. The

hon. Member may therefore rest assured that his representations are being borne in mind.

Oral Answers to Questions — GREAT BRITAIN AND JAPAN (TIENTSIN, AGREEMENT).

Sir John Wardlaw-Milne: asked the Under-Secretary of State for Foreign Affairs what were the terms of the settlement negotiated between the British and Japanese Governments regarding Tientsin?

Mr. Butler: I am happy to state that His Majesty's Government and the Japanese Government have signed in Tokyo to-day an Agreement on certain local questions relating to the British Concession at Tientsin. These questions include police arrangements for the suppression of terrorist acts and the more effective maintenance of law and order, the circulation of currency in the Concession, and the disposal and custody of the silver reserves in a Chinese bank in the Concession. The arrangement covering this latter point has received the assent of the Chinese Government. In order not to occupy the time of the House with a long statement on this matter at the present time, I will, with the hon. Member's permission, circulate certain further details in the OFFICIAL REPORT. I should, however, like to say that His Majesty's Government welcome the conclusion of this Agreement in the confidence that it will facilitate the removal of at least some of the disabilities under which British and other third Power nationals and their trading and shipping interests have been suffering in China, and also as a manifestation of the possibility of solving the mutual difficulties between our country and Japan by patient negotiation.

Sir J. Wardlaw-Milne: I would like to ask my right hon. Friend two questions. Will he tell the House what has happened regarding the barricades that were erected round the Settlement, and can he say whether his reply referring to the silver deposited refers to the whole of the Chinese silver in British hands or what proportion of British silver; also whether it refers to that silver only?

Mr. Butler: In answer to the first point, the barricades round the concession are now being removed; and in regard to the


second point, I think I should prefer to call it the Chinese silver. The Agreement provides for about one-tenth of the total amount to be used for the humanitarian purpose of relieving distress among the famine-stricken population in the Northern areas, while the balance will remain under seal in the bank until its ultimate disposal can be decided later.

Following are the further details:

Certain particulars of the Agreement relating to Tientsin signed at Tokyo on 19th June on behalf of His Majesty's Government and the Japanese Government are being laid before the House in a White Paper. This paper comprises a joint communiqué summarising the objects of the police agreement together with the text of the agreements reached on silver and currency. I would add the following observations to what I said in my Oral reply to the hon. Member.

The police arrangements provide for closer co-operation between the British municipal administration and the local Japanese authorities in cases against persons in whose criminal activities the latter are interested. I wish to emphasise, however, that in such cases the necessary action will always be taken by the municipal police themselves and that the administrative integrity of the British Concession is fully preserved in the Agreement.

The Japanese Government have contended that the silver reserves belong to the people of North China and should be surrendered for their use. The Chinese Government on the other hand claim their ownership as part of the reserves for the national currency. The provisional agreement now reached does not prejudge this issue. It provides that about one-tenth of the total amount shall be used for the humanitarian purpose of relieving distress among the famine-stricken population in the northern area, while the balance shall remain under seal in the bank until its ultimate disposal can be decided in a less controversial atmosphere than is now possible. This settlement of the problem has received the assent of the Chinese Government.

The circulation of the Chinese national currency within the British municipal area will continue. Federal Reserve Bank notes have, however, for some time past circulated side by side with the national

currency. This existing state of affairs is recognised in the Agreement.

As hon. Members are aware, barricades have for the past year been maintained round the Concession and numerous restrictions have been imposed on its residents. These barricades and restrictions are now being removed and the Japanese authorities in North China have also undertaken to do everything in their power to suppress any anti-British action or agitation in the regions under their control.

Oral Answers to Questions — TANGIER INTERNATIONAL ZONE.

Mr. Mander: asked the Under-Secretary of State for Foreign Affairs whether he has any statement to make with reference to the occupation of the international zone at Tangier by Spanish troops?

Mr. Butler: On 14th June, the Spanish High Commissioner at Tetuan notified the French Consul-General that, in agreement with the French Government, the Spanish Government intended to occupy Tangier at once. On the same day also His Majesty's Consul-General at Tangier received a note from the Spanish Consul-General stating that the military occupation of Tangier and its zone had been carried out by troops of the Shereefian Mahalla in the name of the Sultan of Morocco, with the exclusive object of securing the strict neutrality of Tangier. It was added that the occupation is of a provisional character, and that all the rights of interested Powers and of the established services in the zone would be respected.

Mr. Liddall: Will my right hon. Friend recommend his right hon. Friend and the Government to take steps to clear out all Spanish troops from Tangier and so save a much more important and dangerous situation?

Mr. Henderson Stewart: Is the Under-Secretary satisfied that this occupation will in fact preserve the neutrality of that area?

Mr. Butler: His Majesty's Government have been notified by the Spanish Government that they intend to respect the neutrality of Tangier.

Mr. Shinwell: Are we receiving any information from the British Ambassador in Madrid?

Mr. Butler: Yes, Sir. That is why I said that we had been notified. His Majesty's Ambassador is very active.

Oral Answers to Questions — ROYAL AIR FORCE.

AERODROME SITE, NORTHERN IRELAND.

Dr. Little: asked the Secretary of State for Air whether, in view of the urgency of having a second aerodrome established at the earliest possible moment in Northern Ireland, he will give instructions that work on this aerodrome will be proceeded with at once in fulfilment of the repeated promises given during the past months?

The Under-Secretary of State for Air (Captain Harold Balfour): I regret that it would not be in the public interest to add to the information given in my reply to the hon. Member on 23rd May.

Dr. Little: Is my hon. and gallant Friend aware that several months ago an additional aerodrome was promised to be placed on a suitable site, that afterwards another site was prospected and a promise made that, if found suitable, an aerodrome would be erected thereon, and that, so far as is known, no steps have yet been taken to implement the promise made?

Captain Balfour: In reply to the question as to whether or not the matter has been abandoned, I can assure my hon. friend that it has not, and it would not be in the public interest to say anything beyond that.

Oral Answers to Questions — AIRCRAFT PRODUCTION.

Mr. Cocks: asked the Parliamentary Secretary to the Ministry of Aircraft Production whether, in order to expedite production, he will cut out unnecessary elaborations in specifications; and, in view of the fact that aircraft inspection department inspectors have no authority to sanction variations from specifications but must submit all queries to the technical or designs staff for decision, he will see that these departments are adequately staffed to enable prompt replies to be given?

The Parliamentary Secretary to the Ministry of Aircraft Production (Colonel Llewellin): I can assure my hon. Friend

that close liaison exists between the design, production and maintenance directorates of this department to ensure that unnecessary elaborations in specifications are eliminated before production commences. Suggestions from contractors for speeding up production are encouraged, and I am satisfied that consideration of such suggestions is not delayed by lack of adequate staff. In addition the local technical staff stationed at firms have since the Ministry was formed been given wider discretionary power to release equipment not conforming precisely to specification.

Mr. Cocks: Arising out of that very satisfactory answer, is it not the fact that in this department we have a Minister who gets things done?

Colonel Llewellin: Yes, Sir.

Oral Answers to Questions — POST OFFICE.

BIRTH CONTROL BOOKLETS.

Major Sir Jocelyn Lucas: asked the Postmaster-General whether he is aware that booklets advocating birth control, and giving many details of sex problems unsuitable for children to read about, are being sent through the post in open envelopes; that grave anxiety is being caused to parents by this procedure; and whether he will make it illegal to send such pamphlets through the post other than in sealed envelopes?

The Postmaster-General (Mr. W. S. Morrison): I am aware that booklets relating to these matters are sent through the post in open envelopes and that complaints occasionally arise. The transmission through the post, whether in open or sealed packets, of booklets couched in indecent or obscene terms is already prohibited and any new booklet brought under notice in this connection is examined, in case restrictive action may be necessary. The adoption of the suggestion in the last part of the Question would require legislation.

Sir J. Lucas: Has my right hon. Friend taken specific action in the case that I sent to him last week, which was drawn to my attention by the workers themselves?

Mr. Morrison: The case which my hon. and gallant Friend has sent to me is now under consideration.

Mr. Denville: Cannot we put a stop to pamphlets during the war, as was done during the last war, in order to save paper?

PRIORITY TELEPHONE CALLS.

Mr. Gledhill: asked the Postmaster-General whether Members may be granted the privilege of priority telephone calls from their constituencies when dealing with Departments on urgent Parliamentary or national matters?

Mr. W. S. Morrison: Owing to the heavy priority demands which are being made on the telephone service al the present time, it is essential to impose a rigid restriction on the use of the priority facility and, in the circumstances, I regret that I cannot extend the privilege of making priority calls in the manner suggested by my hon. Friend. If, however, hon. Members should find it necessary to make any individual calls of urgent public importance, they should have no difficulty in obtaining early connection if the position is explained to the supervisor.

Mr. Gledhill: Is my right hon. Friend aware that firms engaged on direct Ministry of Supply contracts have this privilege of priority, and surely it is reasonable that, if a Member takes up some particular complaint or difficulty which firms are experiencing, he should have that privilege on that particular occasion?

Mr. Morrison: As I have explained, individual cases of public importance can be dealt with, but the House will appreciate that the more priority facilities are extended in number the less valuable they are.

Mr. Gledhill: Will my right hon. Friend tell me how the Member is to obtain that particular privilege?

Mr. Morrison: Yes, Sir. If there is any case which an hon. Member feels to be of sufficient national importance, he should ask for the supervisor at the exchange and say, "This is a matter of importance," and explain who he is, and then facilities will be granted in every possible way.

Oral Answers to Questions — BRITISH ARMY.

WOUNDED SOLDIERS (RELATIVES' VISITS).

Sir Robert Young: asked the Secretary of State for War whether he is aware that many wounded soldiers are in hospitals at a great distance from their homes; and whether he will take steps to transfer cases which entail no danger to the soldiers to the hospitals nearest their homes and thus enable wives and relatives to visit them at much reduced expense, and in many cases where the expense cannot be met from the allowances paid them?

The Financial Secretary to the War Office (Mr. Richard Law): In the circumstances in which most of these soldiers arrived in this country, it was not possible to distribute them to hospitals according to the location of their homes, and transport and other difficulties make it impracticable to arrange transfers except for medical reasons. When patients are well enough to travel by ordinary conveyance, they are sent on leave and instructed to report at hospitals near their homes.

Sir R. Young: Will the hon. Gentleman remember that many of these wounded men who are located in the West and are far from their homes in the North and that the expenses of travelling are greater than the allowance received?

Mr. Law: I think the expense of travelling is partly met.

Sir Francis Fremantle: Will the hon. Gentleman remember that many of these men are not able to get home because the hospital refuses to help them by transport in any way? Will he see that the ambulance service is properly used, because in certain cases that I know of vehicles have been standing idle?

Mr. Law: I will certainly look into that point.

Mr. G. Strauss: Is the hon. Gentleman aware that many wives and mothers of wounded soldiers are unable to visit their relatives in hospital because the reduction in fares is nothing like enough? They cannot afford it, and will he consider a further reduction in these cases?

Sir R. Young: asked the Secretary of State for War whether a free, or reduced-priced, railway ticket is granted to the wives of British Expeditionary Force wounded officers to enable them to visit their husbands in hospitals, where these are at a distance from their homes; and, if so, will he state the concession made regarding price and distance to be travelled?

Mr. Law: For visits to an officer in hospial, his wife and his children under 16 years of age can use concession vouchers enabling them to make the double journey at single fare. When the officer is dangerously ill, a free travelling warrant will be allowed for two relatives if they are unable to afford the cost of the journey.

Sir R. Young: Does that apply to other ranks as well?

Mr. Law: This Question addressed itself only to officers, but it applies to other ranks as well.

INSTRUCTIONS TO TROOPS.

Sir J. Lucas: asked the Secretary of State for War whether he will arrange that there shall be at least one public wireless set in all main-line railway hotels and others frequented by troops on leave or passing through, in order to ensure that any urgent Government instructions to troops may be brought to their notice without delay in the event of other means of communication being disorganised?

Mr. Law: The method of issuing instructions has received careful consideration, but my hon. and gallant Friend will perhaps agree that it would not be advisable to make a statement on the subject.

EX-SERVICE MEN.

Mr. Robert Gibson: asked the Secretary of State for War whether he will exercise a liberal discretion in regard to the medical histories of ex-warrant and non-commissioned officers who served in the last war and are yet well able and anxious to serve their country at this time; and whether he has any statement to make on the subject?

Mr. Law: Men who served in the last war may be accepted up to 50 years of age for the Auxiliary Military Pioneer Corps and for Home Defence Battalions, and up to 57 years of age for instructional

duties, provided that they are physically fit for active work.

Mr. Gibson: Is the Minister aware that this matter is causing very great concern to members of the British Legion throughout the country, and my own branch in Greenock in particular, and does he recognise that these men have qualifications to train although their medical qualifications, in the eyes of the War Office, are not A1? Will he do something in connection with the matter to allow their ability to be used for the good of the country?

Mr. Law: I do not think I can add anything to the answer.

Oral Answers to Questions — DUNKIRK EVACUATION (CIVILIAN SHIPPING LOSSES).

Captain Plugge: asked the Minister of Shipping whether it is proposed to replace small vessels belonging to civilians who were called on to help with the evacuation from Dunkirk and which were lost in the operations?

The Parliamentary Secretary to the Ministry of Shipping (Sir Arthur Salter): I am afraid it would be impracticable for my Department to replace small vessels lost during the evacuation from Dunkirk, but owners may claim compensation for their loss. A notice which deals with this point among others has been issued to the owners of all ships known to have been engaged in the operation.

Oral Answers to Questions — EVACUATION TO DOMINIONS.

ADVISORY COUNCIL.

Colonel Wedgwood: asked the Under-Secretary of State for Dominion Affairs whether he can yet make any statement as to the possibility of sending children and mothers to Canada and the United States of America; and whether the names of those who wish to go should be sent to him for registration, together with their ability to make any financial contribution?

Captain McEwen: asked the Under-Secretary of State for Dominion Affairs whether, in considering the question of the evacuation of children from the United Kingdom to Canada and Australia, consideration has been given to the possibility of including French children in the scheme?

The Under-Secretary of State for Dominion Affairs (Mr. Shakespeare): This and other questions relating to the same subject have been considered by the Committee mentioned in my answer yesterday to the hon. Member for Broxtowe (Mr. Cocks). My right hon. Friend the Lord Privy Seal proposes, with the permission of the House, to make a statement on the whole subject at the end of Questions, and I would ask the right hon. Member to await that statement.

At the end of Questions:

The Lord Privy Seal (Mr. Attlee): The Inter-Departmental Committee set up to consider offers from the Dominions, the United States and elsewhere for the reception of British children overseas has presented its Report, and the Government has adopted it as a basis for approach to the Dominion Governments. The Report will be published forthwith, and copies will be available in the Vote Office this evening. An executive body to be called the Children's Overseas Reception Board will immediately be established with the necessary secretarial staff to administer the scheme in this country. The Chairman of this Board will be the Parliamentary Under-Secretary of State for Dominion Affairs, who will answer all Questions in Parliament in connection with the operation of the scheme. He will be assisted by an Advisory Council composed of persons with experience of the problems involved. Lord Snell has consented to act as Chairman of this Advisory Council, and the Parliamentary Under-Secretary of State for Scotland, the Parliamentary Secretary to the Board of Education, the Parliamentary Secretary to the Ministry of Health and the Parliamentary Secretary to the Ministry of Pensions have also agreed to serve on the Advisory Council.
His Majesty's Government in the United Kingdom are deeply grateful for the generous offers received from the Dominions and elsewhere to maintain and educate for the period of war children sent out from Great Britain. The Government consider the establishment of the necessary machinery for the operation of the scheme to be a matter of the utmost urgency. Preliminary discussions have already taken place with representatives of His Majesty's Governments in the Dominions, and I have every confidence that the consent of those Governments

and complete co-operation in the scheme will be forthcoming at an early date.

Colonel Wedgwood: May I ask whether, whatever the limitations of the Dominions scheme may be, the American offer will possibly include children under five, mothers and old people, whether the American offer is to take children without any payment, and whether the American Government have now been approached by the Government as have been the Dominion Governments?

Mr. Attlee: Perhaps the right hon. and gallant Member will look at the Report first of all, to see what has been done.

Colonel Wedgwood: But the Report does not deal with America. Cannot my right hon. Friend tell me whether America has been approached?

Mr. Attlee: The Report does cover the United States as well.

Captain Sir William Brass: Will the Minister get into touch with the Fairbridge Farm Schools, which are very experienced in migrating children?

Mr. Attlee: That has already been done.

Sir F. Fremantle: Will some arrangements be made whereby those who wish to migrate their children to America and Canada, and cannot at present do so because of the exchange difficulties, although they are prepared to pay the money themselves, may be able to do so?

Mr. Attlee: That is also dealt with.

Mr. Logan: What experience of children have the people who have been appointed?

Mr. Kenneth Lindsay: Can the right hon. Gentleman tell us something about the nature of the Advisory Council? It is very important that this body should be a businesslike body with experience of the migration of children.

Sir Annesley Somerville: As the Advisory Council cannot possibly be an executive body, may I ask in whose hands the executive power will be placed?

Mr. Attlee: The executive power is in the hands of the Government, acting through the Minister. I have not yet set out all the names of the Advisory Council, because not all the appointments have yet been made. I have merely indicated certain of the appointments.

Mr. Shinwell: Will the right hon. Gentleman see that a woman with experience of children is appointed on the Advisory Council?

Mr. Attlee: I will bring that point before my right hon. Friend.

Mr. Lindsay: I gather that an Advisory Council, of which some names have been mentioned, is to be set up, but is there also to be an overseas reception board which is to be entirely run by the Government with representatives of shipping companies and voluntary organisations and people with knowledge of the subject?

Mr. Attlee: I thought I made it clear. I gave the name of the chairman and certain members, but, of course, the Advisory Council will include people with experience of such problems. That is what I stated.

Lieut.-Colonel Sir Thomas Moore: As this is far too big a question to be discussed across the Floor of the House by question and answer, will my right hon. Friend give us an opportunity of debating the report when it is produced?

Mr. Attlee: Of course, the hon. and gallant Member can raise this question again at a proper opportunity, and doubtless he will do so when he has received the report.

Mr. Maxton: Under what Supply Vote will this come?

Mr. Attlee: The Dominions Vote.

NAVAL AND MILITARY PENSION SAND GRANTS.

Mr. Logan: asked the Minister of Pensions whether he is aware that Gunner Peter Dykstra, No. 933434, Royal Artillery, has had his right foot blown off and now only receives 9s. 9d. per week pension; that he gave his widowed mother 40s. per week before joining up; and what action does he intend to take to make a more adequate pension allowance?

The Minister of Pensions (Sir Walter Womersley): The hon. Member is under a misapprehension as to the facts. Mr. Dykstra is at present receiving pension at the total disablement rate, and will continue to receive this rate until an artificial foot has been fitted and he is

judged to be in a condition to use it. The rate of 9s. 9d. referred to is that judged to be appropriate to the estimated permanent disablement.

Mr. Logan: Is it not a fact that this man is receiving only 9s. 9d.?

Sir W. Womersley: No, Sir. He is not; he is receiving 32s. 6d.

Mr. Logan: Would the Minister kindly see whether this man is receiving that money, because I have not got that information?

Mr. Leslie Boyce: On a point of Order. Is it not a gratuitous waste of time of the House to have these individual cases brought forward when, as has been admitted in the House, the facts of this case were not known to the hon. Member who raised the Question and could have been obtained by writing to the Minister?

Mr. Logan: Further to that point of Order. I have the facts from the man's home in my pocket now, so that it is not a gratuitous waste of time.

Mr. Speaker: I have often dealt with that point of Order before. It has always been the practice in this House that Members can bring cases of local or individual personal interest to the notice of the House at Question Time.

Sir W. Womersley: May I suggest that the hon. Member sees me after Questions?

Oral Answers to Questions — CIVIL DEFENCE.

BINOCULARS AND TELESCOPES.

Captain Alan Graham: asked the Secretary of State for the Home Department whether he will introduce immediate legislation making the possession of a licence compulsory before any individual can purchase any prismatic compass, or any form of sight-aiding glass other than spectacles, such as binoculars and telescopes?

The Under-Secretary of State for the Home Department (Mr. Peake): My right hon. Friend agrees with the object which my hon. and gallant Friend has in view, but he is informed that the Ministry of Supply have not only absorbed the entire manufacturing capacity for these instruments, but have also purchased from dealers all available stocks of binoculars


and telescopes which are suitable for Army use. In these circumstances no useful purpose would be served by attempting to control their sale.

AIR-RAID SHELTERS.

Major McCallum (for Mr. Martin): asked the Home Secretary whether, in view of the shortage of steel, he will consider taking control of the supply of shelters, etc., by private firms?

The Parliamentary Secretary to the Ministry of Home Security (Mr. Mabane): The object which my hon. Friend has in view is already achieved under the Steel Control set up by the Ministry of Supply. Steel for air-raid precautions purposes can now be obtained only under specific authority of my right hon. Friend the Minister of Home Security.

Oral Answers to Questions — NATIONAL WAR EFFORT.

PRIVATE FORTUNES.

Mr. Riley: asked the Chancellor of the Exchequer the approximate number and total value of private fortunes in Great Britain in excess of £10,000 and £20,000, respectively?

The Financial Secretary to the Treasury (Captain Crookshank): No, Sir. I regret that the information is not available.

Mr. Riley: Have the Government any intention of levying a special contribution on these fortunes for the prosecution of the war?

FACTORIES (WELFARE WORK).

Mr. James Griffiths: asked the Parliamentary Secretary to the Ministry of Labour what measures are being taken, in the factories and workshops under his control, to care for the health and welfare of the young persons employed at these places; and, in particular, the increasing number of young women in employment?

The Parliamentary Secretary to the Ministry of Labour (Mr. Assheton): Detailed measures for the health and welfare of persons employed at factories are required under the Factory Acts. These are supplemented to a considerable extent by voluntary action by employers and others, and my right hon. Friend is developing a special organisation, which includes a central Factory and Welfare

Advisory Board, for promoting, with the assistance of the Factory Inspectors and other local officers, further action for the welfare of the employés outside as well as inside the factory. My right hon. Friend was assured yesterday of the support of a large number of voluntary organisations which are interested in this matter.

SKILLED ENGINEERS.

Mr. Ellis Smith: asked the Parliamentary Secretary to the Ministry of Labour whether he is aware that there are thousands of skilled engineers who desire to make a greater contribution to the national effort, many of whom are working pre-war hours; that many of these men have applied for permission to leave in order to start at firms where men are feeling the strain of continuous overtime and have been refused; that some firms engaged on urgently required equipment are not on continuous working; and what steps are being taken to ensure maximum production by using skilled experience to the best advantage, avoiding strain and encouraging the workpeople in their effort for the nation?

Mr. Assheton: I would refer my hon. Friend to the statement made on 22nd May by my right hon. Friend the Lord Privy Seal as to the establishment of the Production Council and local organisations based on area boards to deal with the regulation of labour supply. The Labour Supply Committees are beginning to function, and a staff of inspectors of labour supply has been appointed. The immediate duties of these bodies will include a survey of the labour position in their areas and the arrangements for transferring workpeople from one factory or job to another as required to secure the best use of available labour. Skilled engineers at present engaged on nonessential production who want to transfer to armaments work should give their names and addresses and occupations to the local Employment Exchange, but they should not leave their present employment until asked to do so. I have no information that permission is being refused to men engaged on less essential work to leave their employment for work of national importance. If my hon. Friend has knowledge of such cases, perhaps he would be good enough to send me particulars. I would also refer my hon. Friend to the reply I have just given


to the hon. Member for Llanelly (Mr. J. Griffiths) on the subject of the health and welfare of workers.

Mr. Smith: In view of the fact that the answer is totally unsatisfactory, will the Parliamentary Secretary ask his right hon. Friend to consult the Minister of Supply and the Minister for Aircraft Production as soon as possible because of the uneasiness which is finding expression in the engineering industry? Further, will he as soon as possible see that all the available skilled labour is utilised in order that the nation can get the best possible results and that three shifts are worked in the case of the most needed equipment, and aircraft production?

Mr. Assheton: I need hardly say that my right hon. Friend is in constant touch with the Minister of Supply and the Minister for Aircraft Production, and is most anxious to meet all the demands that are made.

Mr. Shinwell: Has the Parliamentary Secretary any information to show that in some factories engaged on essential production the men are not fully employed? Is that matter being immediately investigated?

Mr. Assheton: That is a matter which is not a concern only of the Minister of Labour.

Mr. Shinwell: Is not the question of the full utilisation of our labour resources in munition factories a question for the Minister of Labour?

Mr. Assheton: It is a question in which the Minister of Labour has a close and important interest, but it is a matter which also concerns other Departments.

Sir Percy Harris: Will the Parliamentary Secretary see that these Ministries do not work in watertight compartments and that there is more liaison beween them, so that results may be obtained more quickly?

Mr. Assheton: There is no question of the Departments working in watertight compartments, and the Production Council is in constant session.

Mr. Gordon Macdonald: Is the Minister aware that there are thousands of skilled engineers doing insurance work in the

country? Does he not think that these men should report to the Employment Exchanges throughout the country?

Mr. Assheton: I hope that the Question and the Supplementary Questions will draw further attention to this matter.

CIVIL SERVANTS.

Mr. Cocks: asked the Prime Minister whether he will, in war-time, apply the same rules regarding the efficient conduct of the war to senior civil servants as to military commanders and will consider retiring or transferring to other positions all high civil servants who were specially associated with the policy which has resulted in a deficiency of tanks, aeroplanes and other weapons of war?

Mr. Attlee: No distinction exists in the treatment accorded to military and civil officers where any question of efficiency is concerned. As my hon. Friend is aware, and as my right hon. Friend the Prime Minister had occasion to point out to the House on the 6th June, responsibility for policy rests not upon officials but upon Ministers.

Mr. Cocks: Is the right hon. Gentleman aware that often the efforts of a Minister may be hampered by civil servants who have been trained in the old school of circumlocution and delay?

Mr. Attlee: The answer to the hon. Member is that if a Minister finds that his orders are not being carried out, he has his remedy.

Mr. Stokes: Arising out of the original answer, is the right hon. Gentleman aware that we shall never get on with this job unless there is a ruthless cutting away of the dead wood in the Civil Service?

WOMEN'S ORGANISATIONS.

Mr. De la Bère: asked the Prime Minister whether he will consider some scheme of unification for all the existing organisations engaged on war work and national service, dealing with the recruitment and enlistment of women throughout the country, with a view to ensuring greater efficiency and co-ordination?

Mr. Attlee: Every effort is made to co-ordinate the activities of organisations engaged in recruiting women for the various branches of national service. I am satisfied that no further special measures are necessary.

Mr. De la Bère: Is it not true that while many of these organisations are doing excellent work, it is also true that there is a great deal of overlapping and competition? Would it not be very desirable to have compulsory service for all women up to a certain age?

Mr. Attlee: I do not think so.

Mr. Stokes: Is the right hon. Gentleman aware that the same inefficiency exists in other organisations and that there is no real co-ordination between the services?

GRAMPIAN ELECTRIC SUPPLY SCHEME.

Major McCallum (for Mr. Snadden): asked the Minister of Transport why the Grampian Electric Supply Company are allowed to continue work on their extensive schemes in the districts of Dalwhinnie and Laggan, having regard to the length of time that must elapse before these schemes become productive; the large number of skilled men employed; the quantity of material used; and the need for skilled men and material in the production of essential war munitions?

The Parliamentary Secretary to the Ministry of Transport (Mr. Montague): I have looked into this matter, and I am satisfied that the work is fully justified.

Oral Answers to Questions — UNEMPLOYMENT (CHILDREN, SCHOOL-LEAVING CERTIFICATES).

Mr. Parker: asked the Parliamentary Secretary to the Ministry of Labour whether he has arrived at a decision with regard to reintroducing the practice whereby Employment Exchanges ask to see the school-leaving certificates of children registering for the first time?

Mr. Assheton: As was promised in reply to my hon. Friend's Question on this subject on 6th February last, this matter was considered, and Employment Exchanges were authorised last March to revive the practice where this could usefully be done.

Oral Answers to Questions — TANK PRODUCTION.

Mr. Cocks: asked the Prime Minister whether he will consider the appointment of a Minister for Tank Production with similar powers to those of the Minister for Aircraft Production?

Mr. Attlee: While I fully appreciate the need for the supply as quickly as may be of the largest possible number of tanks, I think this object will best be secured by the improvements of the tank organisation in the Ministry of Supply, which are being carried out by my right hon. Friend the Minister of Supply.

Mr. Cocks: Is not the production of tanks so important that it might very well absorb the whole attention of a single Minister?

Mr. Attlee: I do not think so.

Oral Answers to Questions — FOOD SUPPLIES (EGGS).

Mr. De la Bère: asked the Parliamentary Secretary to the Ministry of Food whether he is now able to make a statement regarding the rationing of eggs before the autumn?

The Parliamentary Secretary to the Ministry of Food (Mr. Boothby): It is not intended to introduce a scheme for the rationing of eggs.

Mr. Shinwell: Is that because there are too many, or because the public do not require them? Why this hesitation about the rationing of eggs in the present circumstances?

Mr. Boothby: It is because it is almost impossible from the point of view of distribution and also from the point of view of supply.

Mr. Buchanan: But were you not put into the Government to accomplish the impossible?

Mr. Boothby: Perhaps I shall.

Oral Answers to Questions — MINISTRY OF SUPPLY.

SCRAP METAL.

Mr. Marcus Samuel: asked the Minister of Supply whether he will give orders to organise a house-to-house collection and requisition all scrap-metal, commandeering for this purpose the transport services of the local authorities or their contractors, without further delay?

The Minister of Supply (Mr. Herbert Morrison): Most local authorities, acting on recommendations from my Department, are already making house-to-house collections of salvage, including scrap


metals, using for this purpose their transport services. The Iron and Steel Control have launched a village dump scheme through the rural district councils to collect scrap metal in the country districts. The question of issuing an Order or Orders for the fuller organisation of house-to-house collections and the requisitioning of scrap metal, including the use of the services of local authorities and others, is now being considered in consultation with the Advisory Committee of Members of Parliament, and I hope to arrive at a decision thereon shortly.

Sir T. Moore: Will the right hon. Gentleman consider the desirability of local authorities being compelled to take this action in regard to scrap metal?

Mr. Morrison: That is a point which is under consideration, and I expect to reach a conclusion upon it soon.

Sir F. Fremantle: May I ask whether the demolition squads which exist throughout the country and which have the transport necessary, could not be used for this purpose while idle and doing nothing?

Mr. Morrison: That is a matter upon which the views of the Civil Defence authorities will have to be considered, but I will see that the point is looked into.

Sir Waldron Smithers: Is the right hon. Gentleman aware that there are tons and tons of scrap iron and metal available but that local authorities are taking no steps whatever to collect it?

Mr. Morrison: That is rather a sweeping statement.

Sir W. Smithers: It is true.

Mr. Morrison: It may be true of some authorities, but in any case I am giving the matter consideration.

Mr. Lipson: Will the right hon. Gentleman ask local authorities to organise a scrap-metal week in their areas?

Mr. Morrison: I will consider that point.

Mr. Naylor: asked the Minister of Supply what offer of iron railings he has received from the London Inns of Court?

Mr. Morrison: The London Inns of Court are already taking steps to release non-essential railings for scrap purposes,

and I am in communication with them as to the arrangements for disposal.

Mr. Logan: Will the Minister take into consideration the question whether scrap railings should be kept for the purpose of hostilities?

Mr. Thorne: asked the Minister of Supply whether he has received any information about the three-ton German gun that stands on Westerham Green, Kent; and whether the gun will be melted down for munitions?

Mr. Morrison: No information has been received in respect of the German gun on Westerham Green, but local authorities have been invited to offer such guns for scrap purposes, and I have given instructions for the local authority to be approached with a view to the gun being removed.

WASTE FOODSTUFFS (SALVAGE).

Sir Percy Hurd: asked the Minister of Supply whether he is aware that on the lines of the organisation of kitchen waste collection in the boroughs of Tottenham, East Ham and West Ham, about one ton of excellent animal feeding-stuffs per week is obtainable from the dwellings of every 6,000 of the urban population; and whether he will take steps to organise this source of supply on a national scale before effect is given to the proposal that two-thirds of the pig and poultry industries of this country should be destroyed?

Mr. H. Morrison: I am aware of the activities of the boroughs referred to in the collection of kitchen waste for stock feeding, and am in close touch with the arrangements proposed by a firm in Stratford, with the concurrence of the Ministry of Agriculture and Fisheries and my Department, whereby such waste, together with collections from other districts within a radius of 10 to 15 miles, would be treated for the production of feeding meals. A conference on the subject with representatives of boroughs in the London area has been held, and I am giving consideration to the possibility of developing similar arrangements in other parts of the country so far as suitable plants are available.

Sir P. Hurd: Will the right hon. Gentleman take into consultation the authorities in the rural areas?

Mr. Morrison: Yes, Sir; so far as they can function in the organisation they will be consulted.

Mr. Thorne: Is the right hon. Gentleman aware that on collectors' carts in West Ham there is a big basket at the end in which to collect all the tins and cans?

Mr. R. Gibson: The right hon. Gentleman mentioned "other parts of the country" in his reply. Has he Scotland it view?

SHEET AND TINPLATE WORKS, SOUTH WALES.

Mr. J. Griffiths: asked the Minister of Supply whether he will have a survey made, in South Wales and elsewhere, of the buildings formerly used as tinplate and sheet-works with a view to their adaptation for use for production and storage?

Mr. H. Morrison: An investigation is at present being made into the position of the sheet and tinplate works in South Wales which are not in operation and which are not likely to be required as such during the war. The investigation also covers a number of small plants working much below capacity. When the results of the investigation are available, consideration will be given to the question of the adaptation of these works for other production or for storage. A number of such buildings have already been inspected, and steps will be taken at an early date to obtain the use of such as are suitable and required for storage.

PRODUCTION COUNCIL.

Mr. E. Smith: asked the Minister of Supply what changes have been carried out in area organisation that will tend to secure the maximum production in the minimum of time?

Mr. H. Morrison: I would refer my hon. Friend to the reply which was given yesterday to my hon. Friend the Member for Romford (Mr. Parker) to which I cannot yet add anything.

Mr. Smith: Is the Minister aware that the spirit of determination of the people was never greater and that they are getting concerned because that spirit of determination is not being harnessed to secure the maximum results?

Mr. Morrison: I think my hon. Friend need not be apprehensive on that point. My spirit of determination is as great as that of anybody else.

DELIVERIES.

Mr. E. Smith: asked the Minister of Supply whether there is a national and local system of processing and fixing of delivery dates; is there a national and local check kept on the maintenance of delivery dates, or what machinery functions to deal with these problems; and is he satisfied with the efficiency of that machinery?

Mr. H. Morrison: Progress on contracts is watched, both at headquarters in the several production branches, and locally through the area organisation and progress officers.

NON-FERROUS METAL CONTROL.

Mr. Stokes: asked the Minister of Supply whether the fee of £221,400 payable to the British Metal Corporation for' managing the non-ferrous metal control was for the period ending 31st December, 1939; and the number of months' service rendered by that date?

Mr. H. Morrison: The Non-Ferrous Metal Control was set up at the beginning of the war, and the annual fee of £220,750 is payable for the first year of the war, that is, from September, 1939, to September, 1940.

TANKS.

Commander Locker-Lampson: asked the Minister of Supply whether he will invite the hon. and gallant Member for Hertford (Sir M. Sueter) to sit upon all committees under his Department investigating tanks or dive-bombing, in view of his experience in the last war?

Mr. H. Morrison: There are no Ministry of Supply committees investigating dive-bombing. As regards committees on tanks, I am well aware of the experience of the hon. and gallant Member for Hertford (Sir M. Sueter) in the last war. I think, however, that it would be unreasonable to expect me to limit the exercise of my Ministerial discretion to the extent of giving a pledge that one person should be a member of all committees on one subject.

Commander Locker-Lampson: Is the right hon. Gentleman aware that I was only asking for the hon. and gallant


Member for Hertford to be on one of these committees? Will the right hon. Gentleman consider putting this eminent expert on some valuable work? Why is he excluded? Why not get the best man?

Mr. Morrison: I am always ready to consider all suggestions, but the responsibility for selection must rest with me, and it is not a matter with which I can deal across the Floor of the House.

Sir Patrick Hannon: Has my right hon. Friend been in contact with the hon. and gallant Member for Hertford and asked for his views on the possibility of the contribution he could make in these difficult times?

Mr. Morrison: No, Sir. I have been devoting all my attention to the reorganisation of tank production. That was the first thing to receive my attention. I have every respect for the knowledge and experience of the hon. and gallant Member for Hertford, but I can assure the House that if I saw everybody who has great knowledge of tanks, I should do very little else.

SIR ALEXANDER GIBB AND PARTNERS.

Mr. Stokes: asked the Minister of Supply on what grounds Sir Alexander Gibb and Partners have been appointed as consulting engineers and agents to his Ministry; and what are the conditions of their appointment and the fees to be paid them?

Mr. H. Morrison: Sir Alexander Gibb and Partners were employed last autumn as consulting engineers in respect of three specific factories only. They were selected because they were regarded as being the most suitable firm for the work. Messrs. Gibb will receive an annual fee of £15,000 in addition to the approved expenditure incurred by them.

Mr. Stokes: Is the Minister aware that there is grave concern in the engineering world on account of this appointment? With all respect to the competence of the firm, would it not be a good thing if the Minister would cause to be removed from their letter-heading the statement that they are appointed consulting engineers and agents for the Ministry of Supply?

Mr. Morrison: In respect of these particular factories that would be true, but

if the letter-heading has a wider implication, I will certainly consider the point. The hon. Member will appreciate that the appointment was made some time ago. I have no reason to believe it was a wrong appointment, but I will give consideration to the point to which the hon. Member has drawn attention.

Mr. J. Griffiths: In view of the fact that the workpeople of this country have been asked, and are willing, to make very great sacrifices, will the Minister bear in mind that the publication of figures of the sort he has mentioned does cause grave concern?

Mr. Morrison: I have published the figures because the hon. Member asked a Question on the matter. The Question being asked, I do not think I had any right to refuse to answer it. Certainly, the point which the hon. Member for Llanelly (Mr. J. Griffiths) has mentioned is a relevant one. Of course, these are fees for highly specialised professional services, and I understand they are in the region of what is usually paid. I will keep in mind the point he has made.

Mr. Griffiths: Will the Minister bear in mind that the working classes of this country, the miners, for example, are sacrificing customs that have been established for hundreds of years, and are dismayed when other people are paid such fees?

Mr. Morrison: That is a fair point. This is an appointment which I did not make myself, but one must face the realities of the position all round. I entirely agree with my hon. Friend that those other considerations are relevant.

Mr. Kirkwood: It this a full-time job?

Mr. Morrison: It is a very big job. It is the building of three very big factories that will run to a very high cost.

SCIENTIFIC RESEARCH.

Mr. Stokes: asked the Minister of Supply whether, in view of the fact that the names of controllers of all departments have been published, he will give his reasons for not publishing the names of the chief scientific men employed in his Ministry, together with the names of their departments?

Mr. H. Morrison: As I informed my hon. Friend on 12th June, the detailed


information for which he asks could not be published without giving an indication of the lines of the war-time research programme, but I am prepared to give him the information privately.

Mr. Stokes: Will the Minister consider how impossible it is for people to be able to appreciate with whom they should communicate on these points if they do not even know the people responsible for the various Departments concerned? There is nothing private about this.

Mr. Morrison: Anybody knows that he can communicate with the Ministry of Supply, and the communication will be passed on. I must remind the hon. Member that the Question he asked me was a highly indiscreet one, in which he wanted information that would give the enemy knowledge of the general lines of our research. This research is exceedingly secret, and I, at any rate, must exercise a proper sense of responsibility.

Mr. Stokes: Will the Minister realise that I have no desire to ask for information that would give help to the enemy? Quite the contrary. What is desired is that the names should be known so that people would know that the departments are being managed by the most competent persons.

Mr. Morrison: Certainly, I would not accuse the hon. Member of any such desire. I was only giving him advice.

LINEN MANUFACTURE, NORTHERN IRELAND.

Dr. Little: asked the Minister of Supply whether he is aware that in a firm of linen and damask manufacturers in Northern Ireland, having 600 looms and over 300 making-up machines, only 10 per cent. of the looms are being utilised by, and not a single making-up machine is doing work for, his Department; and whether, in view of the urgent need at present for such materials as this firm can supply, he will make use of their resources to the fullest possible extent?

Mr. H. Morrison: I am not aware of the identity of the firm in question. Speaking generally, however, it is not possible in existing circumstances, owing to the shortage of flax and the consequent necessity of using substitute materials, to keep linen manufacturers fully employed on Government orders.

Dr. Little: Will the Minister take into consideration their position and give them as much work as possible?

Mr. Morrison: I have very great sympathy with the hon. Member's point, but the position is that really there is no immediate use for this type of product to the extent indicated.

Oral Answers to Questions — NORWAY (OVERSEAS POSSESSIONS).

Mr. Parker: asked the Under-Secretary of State for Foreign Affairs whether Norwegian overseas possessions have been occupied by Allied Forces to prevent their use as German bases?

Mr. Butler: The hon. Member will appreciate that I must confine myself to saying that the importance of these overseas possessions has been gauged.

Oral Answers to Questions — ANTI-FASCIST PROPAGANDA.

Mr. Sorensen: asked the Minister of Information whether he has secured the services of Italian anti-Fascists in exile in this country for the purpose of propaganda among the Italian people; whether he has taken action to influence the Italian people in this country, the British Empire and neutral countries against Fascist theories and practice, and towards democratic principles of peace and social order; and whether he will secure the services to this end of prominent American citizens of Italian origin?

The Minister of Information (Mr. Duff Cooper): The answers to the first two parts of the Question are in the affirmative. As regards the last part, I understand that a number of United States citizens of Italian origin have already voiced their criticism of the action of the Italian Government, but I do not think it would be desirable to enlist the services of United States citizens in the manner suggested.

Mr. Sorensen: May I ask whether those American citizens of Italian origin who have voiced their criticism of the present Italian Government have had their remarks broadcast from this country to the Italian people?

Mr. Cooper: I am not sure. I will look into the point.

Oral Answers to Questions — COLONIES (COMPULSORY MILITARY SERVICE).

Captain Plugge: asked the Under-Secretary of State for the Colonies whether he will give the names of those Colonies in which compulsory military training has been introduced; and whether he will recommend the adoption of this step in those Colonies where the system has not already been introduced?

The Under-Secretary of State for the Colonies (Mr. George Hall): Legislation providing for compulsory military service exists in the British Solomon Islands, Ceylon, the Falkland Islands, Fiji, the Gilbert and Ellice Islands, Hong Kong, Kenya, Uganda, Malaya, Tonga, Northern Rhodesia and Nyasaland. Proposals are now under consideration for the introduction of similar legislation in the four West African Colonies, namely, the Gambia, Sierra Leone, Gold Coast and Nigeria. It has not so far been found necessary to introduce legislation of this kind in other parts of the Colonial Empire.

Sir P. Hannon: Is the Minister giving the suggestion to the various parts of the Colonial Empire, because he ought to institute a service of this kind at the earliest possible moment, in view of the present situation?

Mr. Hall: I made reference to that point in the concluding part of my reply.

Dr. Haden Guest: Will the extension to the West African Colonies include the Protectorates as well as the Colonies proper?

Mr. Hall: I have given the names of Gambia, Sierra Leone, Gold Coast and Nigeria.

Dr. Guest: The hon. Gentleman will, of course, be aware that in the case of Nigeria part of it is a Colony and part of it is a Protectorate. Will this apply to both parts?

Mr. Hall: I will look into that and will let the hon. Member know.

Oral Answers to Questions — WEST AFRICA (NEWSPAPERS, PAPER SUPPLIES).

Mr. Sorensen: asked the Under-Secretary of State for the Colonies whether

he is aware that whilst paper for printing is available for journals issued for and published by British firms in West Africa, native printers and publishers cannot secure supplies; whether he will state the firms controlling the importation of paper into West Africa; and whether, to allay discontent, he will arrange that native printers and publishers should be able to secure a quota of paper?

Mr. George Hall: The position is, as I informed my hon. Friend in reply to his Question on 22nd May, that newspaper proprietors in West Africa have so far been left to make their own arrangements for the supply of newsprint. None of them, so far as I am aware, has asked the Government for assistance in obtaining supplies, but the matter is at present under review: and the suggestion made by my hon. Friend will be considered.

Mr. Sorensen: Can we have a reply at an early date as to whether they can obtain supplies?

Mr. Hall: As is stated in the reply, we have had no complaints from any of the newspaper proprietors that they have been unable to receive supplies. I will certainly inquire on the lines suggested by my hon. Friend.

BUSINESS OF THE HOUSE.

Ordered,
That the Third Reading of the Finance Bill may be taken immediately after the consideration of the Bill, as amended, notwithstanding the practice of the House as to the interval between the various stages of such a Bill."—[Mr. Attlee.]

MESSAGE FROM THE LORDS.

That they have agreed to,—

Bournemouth Gas and Water Bill, with Amendments.

SOUTH-EASTERN GAS CORPORATION LIMITED (ASSOCIATED COMPANIES) BILL [Lords].

THE CHAIRMAN Of WAYS and MEANS, pursuant to Standing Order 88, called the attention of the House to certain points in connection with the Bill.

Orders of the Day — FINANCE BILL.

As amended, considered.

NEW CLAUSE.—(Special provisions as to mines, oil-wells, etc.)

(1) Upon an application made with respect to any class of trades or businesses consisting in the getting of minerals or oil from any mine, oil-well, or similar natural source of a wasting nature, the Board of Referees may by Order direct that in relation to trades or businesses of that class the references in Section twenty-seven of this Act to 6 per cent. and 8 per cent. and the references in Sub-section (9) of Section thirteen of the Finance (No. 2) Act, 1939, to 8 per cent. and 10 per cent. shall, where the person carrying on the particular trade or business so desires, be construed as if thy were references to 6, 8, or 10 per cent., as the case may be, increased to such extent as may be specified in the order:

Provided that no order shall provide for increasing the said percentages by more than a further 4 per cent.

(2) Where any such order has been made with respect to trades or businesses of any class, then, in the case of a trade or business part only of which falls within that class, the increased percentages shall be applicable to such extent as may be just, having regard to the extent to which the trade or business falls within that class.

(3) The powers of the Commissioners and the Board of Referees under Section twenty-seven of this Act, as applied by the Fifth Schedule to this Act, shall, in relation to any trade or business falling wholly or partly within any class with respect to which such an order as aforesaid has been made, include power to proceed as if the provisions of the said Fifth Schedule so applying the said Section twenty-seven were adapted and modified to such extent, if any, as they may think necessary in order to enable effect to be given to the provisions of this Section.

(4) This Section shall apply to any subdivision of a class of trades or businesses based either on any special feature of the trades or businesses within that sub-division or on locality as it applies to a class of trades or businesses, in any case where the Board of Referees are of opinion that the sub-division can properly be dealt with separately.—[Sir K. Wood.]

Brought up, and read the First time.

3.40 p.m.

The Chancellor of the Exchequer (Sir Kingsley Wood): I beg to move, "That the Clause be read a Second time."
This new Clause deals with certain aspects of excess profits taxation. The House will remember that when we discussed it on the Committee stage I gave an undertaking to take into consideration

a number of suggestions that were made then. I stated that I was impressed with the case that had been put in relation to companies working wasting assets. On further consideration of the matter, I had to admit that a case had been made out for allowing a higher percentage upon the capital of concerns engaged in obtaining minerals, oils, or similar natural wasting sources. In such cases the return on the capital must provide, over the life of the wasting source, for the amortisation of the capital expended on the undertaking. This is particularly necessary at the present time because the wastage of such assets during the war has been and will be accelerated by the demands made on industry for increased output, and this, of course, inevitably affects our natural resources. The Government have recently made many requests in cases of this kind which have been responded to by the concerns affected.
This new Clause will affect two classes of percentages on capital. The first is the 6 per cent. and 8 per cent. laid down in Clause 27 of the Bill in relation to the application for a substituted standard where the profits of the standard period are very low. The second is the statutory percentages of 8 per cent. or 10 per cent. on capital prescribed in Section 13, Subsection (9) of the Finance (No. 2) Act, 1939, as amended by Clause 31 (2) of this Bill. I think it is right to weight the allowance for this particular factor and to provide for a ceiling of the ordinary rate plus a further rate of 4 per cent. It is true that under the provisions of the new Clause the Board of Referees might, in theory, grant the whole of the additional 4 per cent. in any case that comes before them. I suggest that it would be much more likely that, although the maximum addition to be made in the most extreme type of case might go to that extent, the Board will grant additions of 1, 2 or 3 per cent. in cases of this description. It is for the Board of Referees to decide whether an application is made by a body of persons who can claim to represent any sufficient part of a trade or business, and they will decide whether an application can be made in general terms or whether individual application will have to be made. On the last occasion the Committee agreed with me that this was a case that I should meet. I have considered the other cases, but this is the only one which is not met by other


provisions in the Bill. It is, I think, a fair and reasonable concession to make.

3.46 p.m.

Mr. James Griffiths: Those of us who have been connected with the mining industry are wary about this proposal. I well recall that at the end of the 1926 stoppage in the coal industry, when we made new wages agreements, we had to discuss a re-arrangement of the ascertainment of wages, and the question of what permissible costs apart from wages were to be set off came under consideration. The question raised by this new Clause was then brought forward, and the claim was made that, because the mining industry was engaged in obtaining a wasting asset, that coal was being worked and that some day it would be worked away and all the capital sunk in it lost, therefore the owners were entitled to claim an amortisation allowance. I would remind the Chancellor that that claim was closely argued. In the end it was withdrawn in some areas, the owners being convinced that a claim had not been made out, but where it was not withdrawn it was submitted to independent arbitration and turned down.
I would ask the Chancellor to give further consideration to this question. Those of us who are connected with the mining industry want to see the owners given the same fair play as everybody else, but we do not want to see, and we shall not stand for, profits being made out of the mining industry in this war on the scale on which they were made in the last war. In company with my colleagues in South Wales, I attended a conference last Saturday at Cardiff at which the miners were asked, and willingly and enthusiastically gave, a pledge to do their utmost in the national interest at this time. They were asked to give up things which they valued very much. The South Wales miners were asked to work on a Sunday night, and that was asking them to do something against their religious instincts. They were asked to give up practices and customs, and they agreed to give them up willingly because they believed they were thereby doing a service to the nation. A personal appeal was made by my hon. Friend the Secretary for Mines. We were asked, "If the miners respond to this appeal and put forward their best effort, are we sure that

that effort is being made for the nation and not for the profit of individuals?" We replied, what we all understood to be the case, that the profits of the coal mining industry would be subject to the same provisions as other industries, and that there would be 100 per cent. tax on all excess profits.
What is the position in which the Chancellor is placing us to-day? Under this new Clause the mining industry may be able to get more favourable terms and extra profits. That is the meaning of it. They will be able to go to the tribunal and say, "We are working in the mining industry, engaged upon what is a wasting asset and therefore we are entitled to an increased rate of dividend, to something over and above what is going to other industries." It is not merely the coal that is a wasting asset; the life of the miner is a wasting asset, and when men are asked to speed up in the pits it means that they are being asked to take greater risks. We are not merely speeding up production but speeding up danger. I would speak frankly and say that this is not the time to give the mine owners greater profits.

Mr. Spens: What does the hon. Member mean by mine owners? Does he mean royalty owners?

Mr. Griffiths: I understand that this provision does not apply to royalty owners. We settled the royalty owners a long time ago, and they have no claim. I ask the Chancellor to consider the point of view I have put forward, because it is not a service to the nation but a disservice to give the owners of coal this augmentation of profits. We know what the position is now. We know that profits are being made, far too large profits. Why should the owners be allowed to make this appeal? It is an appeal which has been turned down before. It is something they have tried in wages ascertainment negotiations for many years past. As it has been turned down in that connection why should the Chancellor admit the claim now? The Chancellor said that representations had been made to him about the matter. In days like these, when we want national unity, it should have occurred to him that in a matter of this kind, having regard to the agreements existing in the mining industry, the men's representative should have been con-


stlted. In the wages ascertainment arrangements, first of all the prices realised for coal are ascertained and then there is set off against that sum wages costs and costs other than wages. Therefore, proposals of this kind vitally affect the wages of the men. Was any consideration given to the question of consulting the Mineworkers' Federation of Great Britain? The Financial Secretary to the Treasury was for years Secretary for Mines, and in considering this problem he must have had in the background of his mind his knowledge of the mining industry and its problems. Why should not the Mineworkers' Federation be consulted? It has quite as much right to be consulted as have the mine owners. Therefore, I ask the Chancellor to withdraw this Clause. In the interests of the nation we have asked the miners to give everything for the nation, and they will do so, but if it goes out from this House that we are giving the mine owners more profits, that will undermine anything that we are doing.

3.55 p.m.

Mr. Spens: I do hope that my hon. Friends opposite will not think that I am speaking on behalf of property or anything of that sort. I take an entirely different view from that which I was so very sorry to hear put forward by the hon. Member for Llanelly (Mr. J. Griffiths). I would remind him that during recent years the mining industry has been working under Government schemes. All bon. Members opposite know this. Those Government schemes have been introduced under the Coal Mines Act for the reason that the mining industry, and particularly the export section of it, has been a depressed industry. The mine owners, I mean the working owners, the lessees, have been controlled by sales schemes and all sorts of things, and in the depressed sections of the mining industry, as hon. Members opposite know very well, there has been a constant carrying forward of deficits on wages ascertainments, particularly in Durham and South Wales.

Mr. Batey: rose—

Mr. Spens: No, let me put my point. I want to put it fairly. Hon. Members also know that as the war approached and since the war has started the mine owners of this country have been called upon by the Government to make superhuman efforts

to increase production in order to increase the export trade.

Mr. Gordon Macdonald: So have the miners.

Mr. Spens: Yes, and the miners. I want hon. Members to listen patiently. I am not trying to put a hostile case. Indeed, so different is the position that I wish the hon. Member for Chester-le-Street (Mr. Lawson), with whom I have talked this over, were here. I very much regret his absence from the House. What was the position? These mining companies, which had been struggling in these depressed areas, had little or no finance with which to open up and develop additional coal faces. They were in grave financial difficulties. But, answering the call of the Government, they set to work to raise additional finance and to get the mines back into production. There is not an hon. Member opposite who does not know that in Durham, in South Wales and elsewhere coal is being produced to-day which none of us could have hoped two years ago would have been produced.
What was the position when the 100 per cent. Excess Profits Duty was introduced? It is not a standard of distributable profits. Hon. Members must realise that the standard profits are all that the owner of the business has to put aside for reserves, for capital improvements and for distribution of dividends—they are all he has to deal with as his. All the rest belongs to the Government. Therefore, when the 100 per cent. Excess Profits Tax was introduced owners said, "We are willing to do all we can to get our mines back into full production. We want to employ every miner we can. There are miners whom we can get back into production, but we must have money to do it. If we have only the ordinary standards of profit left to us we shall not have finance with which to do it." It is not only the mine owners who are affected, but hundreds of thousands of miners cannot be brought back into work unless some exception is made for this particular depressed industry.
I make no apology to the House or to those who represent miners for saying that in the last three months I have been doing all I can to try to get out of my right hon. Friend an arrangement under which some special consideration shall be given to the mining industry in order that this great development of the mines of the


country may go on. I ask hon. Members who take the opposite view seriously to reconsider whether they are doing a wise thing, because, believe me, if this Clause does not go into the Bill, the extension of the mining industry which is so desperately necessary for our war effort, particularly in Durham and South Wales in respect of our export trade, is bound to be curtailed. Therefore, I beg my right hon. Friend to hold fast to the Clause, which I regard as one of the most essential in the Finance Bill.

4.0 p.m.

Mr. Batey: I hope the Chancellor of the Exchequer will withdraw the proposed new Clause. If he does not, some of us will be almost compelled to vote against it in the Lobby. The hon. and learned Member for Ashford (Mr. Spens) began by stating that he did not intend to speak on behalf of the coalowners, but I thought he did extremely well for the coalowners. I do not know any hon. Member who could have delivered a better speech on behalf of the coalowners than that to which we have just listened. What were the reasons advanced by the hon. and learned Member? He argued that the coalowners had been hampered and had had put upon them conditions, such as those relating to sales associations and other things of that kind. In whose interests was that legislation passed? It gave power to the coal-owners to fix prices, to arrange production and to sell the coal. That legislation was passed in the interests of the coalowners and nobody else.

Mr. Holdsworth: That was supported by the hon. Member and his colleagues.

Mr. Batey: Yes, we supported it, because while it was in the interests of the coalowners, the miners also got some benefit. But our men would get no benefit whatever from the proposal in this new Clause. The hon. and learned Member for Ashford argued that in order to develop the coal mines at the present time, it was essential that the coalowners should have money. If they want money, let them get it as other people have to get it. Why should the Government provide them with money? I submit that the development of the coal mines in order to employ more miners does not depend

upon the coalowners getting more money. During the past week-end I was looking at an ascertainment in the county of Durham covering the past 12 months. It showed that the profit of the coalowners had been 1s. 5d. per ton. That is not a bad profit. Nobody can sneer at it. It is, indeed, a handsome profit, and when the coalowners are getting profits of 1s. 5d. a ton there is no need for the Chancellor of the Exchequer to extend any pity to them, or to say that because they are only getting 10 per cent. there should be power to bring that up to 14 per cent. That kind of thing we will not stand.
We remember how coalowners and others in 1929 were relieved of three-quarters of the local rates. Although industry has been having a good time since then, while owners of property have had to bear the burden of local rates, there has been no proposal to rescind that legislation or to ask the coalowners and other owners engaged in production to pay what they had been paying prior to 1929. That was one of the actions of the late Prime Minister when he was Minister of Health and when the present Chancellor of the Exchequer was Parliamentary Secretary to the Ministry. They relieved the employers of three-quarters of the local rates, while poor people occupying houses and shopkeepers and others had to bear the burden of local rates. There is no proposal to put these employers of labour back where they were in 1929 in relation to local rates. We have also to remember that coalowners and others have had advantages in regard to reliefs for wastage of machinery and in other respects.
Now when we expected that the Government really intended to do something and to make coalowners and others pay 100 per cent. of their extra profits during the war, when we felt that, at last, a really important step was about to be taken in this direction, we have the Chancellor of the Exchequer coming forward with a proposal to make up the profits of coal-owners and others. This proposal applies not only to those engaged in coal-mining but also to those engaged in the extraction of oil. There cannot, however, be very many oil mines in this country, while we have an enormous number of coal mines. It is not right that the Chancellor of the Exchequer should at this time bring for-


ward a proposal to increase the profits of coalowners up to 14 per cent., and if he in tends to go on with it, we shall be compelled to go into the Lobby and vote against the Clause.

4.5 P.m.

Sir K. Wood: I think there is some misapprehension about the meaning of the proposed new Clause. I hardly think that anyone who has followed the discussions on the technical parts of the Finance Bill, and especially those who took part in the Committee discussions, would easily reconcile the speeches of the two hon. Members opposite with the actual proposal in the Clause. All we are doing in this Clause is to make an equitable arrangement in connection not only with coal mines, but with other concerns which have wasting assets. The Clause, I would emphasise, applies not to coal mining only, but to all mines and in particular to copper mines which are being called upon to produce, in one year, a copper output which normally would not appear for several years. It is very largely to assist concerns of that kind in the special circumstances existing to-day, that this concession is being made, and I do not think the fact has been sufficiently appreciated by hon. Members opposite that apart from new businesses and new capital it applies only in relation to the provisions of Clause 27 (2) of the Finance Bill. Those provisions relate to cases where there have been no profits in the standard period or where the profits of that period were
so low that it would not be just to ascertain the standard profits of the trade or business by reference to the actual profits of the standard period.
Therefore, this is not a proposal having results such as those to which hon. Members opposite have referred. It relates mainly to the particular cases which I have indicated, and the main purpose of the new Clause is to provide a fair standard for those concerns—not only coal-mining concerns, but many others—which may have had losses or which have had practically no profits at all in the standard period. Under Clause 27 provision is made for fixing a figure of 6 per cent. on the amount of the capital employed as a maximum in ascertaining the standard. The main object of what I propose to do in this Clause—and I have rejected all the other proposals which were suggested to me—is to provide that

in cases where there have been no profits in the standard period or where those profits were so low that it would not be just to ascertain the standard profits of the trade or business by reference to them, the Board of Referees shall have the right, on a case being made out to them, to increase the percentage by 4 per cent.

Mr. J. Griffiths: The right hon. Gentleman has obviously gone into this matter very carefully. He must be aware that of the cases which will be submitted, the great bulk will be cases of coalowners. It is plain that the coalowners are chiefly concerned, and the speech which we heard from the hon. and learned Member opposite was on behalf of the coal-owners. May I, then, ask the right hon. Gentleman who has been considering this matter very closely, what is the tonnage profit rate which he has in mind as being low enough to justify this new ascertainment?

Sir K. Wood: It is not a matter of a tonnage rate at all. It applies, as I have said, to cases in which the Commissioners of Inland Revenue or the Board of Referees are satisfied, in the words of Clause 27 (2):
(a) that there were no profits in the standard period; or
(b) that the profits of that period were so low that it would not be just to ascertain the standard profits of the trade or business by reference to the actual profits of the standard period.

Mr. Griffiths: What is to be the basis of deciding whether profits are low or not? How is the referee to decide that in a given period the profits were low?

Sir K. Wood: The words are:
so low that it would not be just to ascertain the standard profits …

Mr. Griffiths: The right hon. Gentleman, in making up his mind about this Clause, must have had before him evidence that there were concerns in the coal-mining industry whose profits were low. Did he fix in his mind a figure of what he considered to be a low profit?

Sir K. Wood: That will be a matter for the Commissioners or the Board of Referees themselves to decide, and they are an independent body. If no profits at all were made, that is easily ascertainable, and it would then be possible to operate the new Clause.

Mr. Glenvil Hall: Will the referee be entitled to take into account profits made by subsidiary concerns?

Sir K. Wood: I take it that it would be a matter of the general profits of the concern, but perhaps the hon. Member will allow me to deal now with the point put by the hon. Member for Llanelly (Mr. J. Griffiths). I want to satisfy the hon. Member that there is a misapprehension of the purpose of the Clause. It applies mainly in the two cases which I have mentioned. Where there are no profits, there will be no doubt or difficulty. I should imagine that no one would argue that where there are no profits at all in the standard period, the Referees should not be able to put this extra percentage into operation. Then the hon. Member asks what is meant by profits which are so low as not to represent a fair standard. The Commissioners or the Referees themselves will have to be satisfied on the case presented to them, that it would not be just to ascertain the standard profits of a concern by reference to the actual profits of the standard period. They will have to determine, having taken into account all considerations whether or not it would be just in the special circumstances of the particular case to fix the standard profits by reference to the actual profits in the period.
The primary purpose of the new Clause is to give a fair standard to all those companies which have either losses or have made practically no profits at all in the standard year. I do not think the hon. Members opposite have appreciated the fact that for all ordinary trading concerns under Clause 27 six per cent. on the capital employed is the maximum nor do I think they have sufficiently appreciated the fact that the 100 per cent. Excess Profits Tax applies in these cases. This new Clause is an effort which is being made, I think justly and rightly, to give a reasonable standard to concerns which are in such a condition that the profits for the standard period would not be a fair or proper basis. Unless you do this, you are taking away from them not only the 100 per cent. excess profits, but probably the possibility of any profits at all, which would not, I think, be in the interests of anybody concerned. There is no attempt to give an extra 4 per cent. profit to the mining industry generally. It is merely an attempt to meet fairly a

very difficult situation in cases where it can be shown that the profits are so low that a standard calculated on them would not be just. I hope that hon. Members will be satisfied with that explanation. I would examine the matter further in order to see whether there are any additional safeguards which I can suggest to meet the points put by hon. Members, but I think they will find that it will be in the interests of everybody concerned that this proposal should be adopted.

Mr. J. Griffiths: As this has some relationship to the question of wages ascertainment, may I ask, Was it thought desirable or will it be thought desirable to consult the Miners Federation of Great Britain?

Sir K. Wood: I must say I did not think it was an appropriate case for such consultation. It is entirely a matter of the considerations which I have already outlined, and I did not think there would be any objection to the proposal from anybody concerned in the industry.

Mr. Graham White: Nobody has mentioned the matter, but I presume that the maximum of 14 per cent. will still be subject to Income Tax at 7s. 6d. in the £. It would be most surprising if the result of this proposal were to allow any company to make anything more than a most modest return on its capital.

4.16 p.m.

Mr. Craven-Ellis: As I understand the proposal, it is put forward to give to certain mines an opportunity of making a profit because they may have had a bad period, and also because the profit which it is intended by this Clause that they should have is dependent upon a wasting asset. I do not understand how coal, oil or any mining business is a wasting asset. It is a diminishing, but not a wasting, asset. The point which was put forward by my hon. and learned Friend the Member for Ashford (Mr. Spens) was a very good one, but was entirely beside the point of the proposed new Clause. The points put forward by the other side have also been very good, but I cannot see that to regard the use of minerals as a wasting asset, and as a basis for further provision for profit for the owners and operators of those mines, is the right course to adopt. If this course is accepted, it means the acceptance of a


very vicious principle. The basis upon which it is intended to make a reserve fund for the purpose of meeting losses suffered from time to time by mines—like every other industry—is wrong in principle, and I should like to see the proposed new Clause withdrawn.

Mr. Jennings: How does the hon. Gentleman differentiate between ordinary plant, machinery and assets in a company which are allowed depreciation and, on the other hand, the assets of a mine or mineral concern which are not?

Mr. Craven-Ellis: There is no relation whatever between the machinery or plant which is operating in a mine and that in any other factory. That machinery is justifiably carrying depreciation and maintenance allowances; that is a vastly different matter from the mineral itself.

Mr. Jennings: They are both assets.

Mr. Craven-Ellis: Yes, but after careful calculation as to the value of the asset underground and taking a proportion of it in each ton sold throughout the period of operation of the mine, the value of the asset should have been disposed of.

4.18 p.m.

Mr. Gordon Macdonald: I am glad that the Chancellor of the Exchequer is talking the matter over, because I can appeal to him more easily for reconsideration of the declaration which he has made. I do not think that he quite appreciates one point about the Excess Profits Tax. The argument about this tax has been used by every hon. Member on this side to convince the workers that, in this war, we are to get a fair deal, and that Parliament is calling upon the wealthy classes of this country. The right hon. Gentleman ought not to forget that the miners have an organisation; he seems to have forgotten its existence altogether. He says he does not think the organisation ought to be consulted. May I remind him that this proposal affects adversely or otherwise every miner in the country? I do not think the right hon. Gentleman has yet appreciated that wages in the mining industry are settled in relation to the whole proceeds of the industry.
We have no desire to divide the House on this matter, but the proposal will not get approval from hon. Members on this

side, especially from the mining Members, in its present form. The right hon. Gentleman tells us that he has brought the proposal forward only because he was afraid that the mining industry might suffer an injustice. Very few mines are in operation which were not operating on 3rd September last year. There may be some colliery companies which were not making excess profits on 3rd September; the profits in the quarter at the end of July were not as good as their owners desired them to be. The right hon. Gentleman must not be surprised if we are not impressed by his arguments. He does not appear to know—I say it in all humility—as much about this Clause as does the hon. and learned Member for Ashford (Mr. Spens), who was very honest. He told us that he had been working for weeks and weeks to get this Clause, and, having got it, he hopes that this side of the House, whom he never consulted, will be convinced by what the Chancellor of the Exchequer has said.

Mr. Spens: Why did the hon. Gentleman say that I did not consult that side of the House?

Mr. Macdonald: I said that the hon. and learned Member did not consult the section of this House which knows most about the mining industry.

Mr. Spens: Which section?

Mr. Macdonald: We know the hon. and learned Member for Ashford. We remember where he stood during the discussions on the nationalisation of royalties. We know that he is not the champion of the miners, but the champion of the coalowners every time, when he speaks in this House. The Chancellor of the Exchequer must give serious reconsideration to this suggestion. During the last war, the coalowners of this country took every advantage to fill their pits with new machinery, paid for by the State. Let me warn the right hon. Gentleman that a similar thing is not happening now in the mining industry. The Secretary for Mines could tell him, as we have told him, that the coalowners of this country are taking great care of their own interests. They always do. I want the Chancellor of the Exchequer to reconsider this question. He has a consultative committee, consisting of representatives of owners and men in the mining industry, national leaders on each


side. Surely this important question should be sent to that committee for consideration. The committee should be asked to consider it. The right hon. Gentleman need not be afraid that the national leaders of the miners will not consider every fair proposal. They do not want the coalowners to be treated worse than other concerns, but they do not want proposals brought forward in this House which would give the coal-owners preferential treatment.
At the moment I do not like talking in this House, because my mind is occupied with the serious crisis in which we are placed. I have a job to talk at any time, but when I find an issue brought here which I know will endanger the supreme effort of the miners, I must tell the right hon. Gentleman that, if it gets about in this country to-day that he is championing a proposal which will defeat the 100 per cent. Excess Profits Tax, he will undermine the confidence and the effort of the miners, without which this war, and any other war, cannot be won. I therefore ask the right hon. Gentleman to reconsider the proposal. Before the Bill gets to another place will he consult both sides of the industry? We have no desire to divide the House to-day, and there will be no Division so far as I am concerned. I want the Chancellor to say, in return, that, between now and the Bill getting to another place, he will consult both sides of the industry.

4.27 p.m.

Mr. Collindridge: I should like to add a word or two to the discussion. I think we should congratulate the hon. Member for Southampton (Mr. Craven-Ellis) upon the point of view he has put. If the proposal of the right hon. Gentleman were carried out, our people in the mining industry might share what could be veritably called the loot, but we are not wishful to do it, from any point of view. We realise, as my hon. Friend the Member for Ince (Mr. G. Macdonald) has said, that, in the immediate winning of new coal, old mines are not likely to be opened. It is largely going to be done by further development of existing mines. Not only in the producing, but in the coal-consuming regions there will be great dissent from the right hon. Gentleman's proposal. I heard the hon. and learned Member for Ashford (Mr. Spens) talk

about wasting assets, the implication being that the coal was a wasting asset. We do not object to the idea that the machinery which is used to get the coal is a wasting asset, but to talk about the coal being a wasting asset is like a shopkeeper who sells bacon over the counter saying that he is selling a wasting asset.
We are definitely against the proposal. I contrast the suggestion of the right hon. Gentleman and the terms which are brought forward with those meted out by the Government to the human material that they take to fight in the winning of this war. I remember that we discussed to what extent we should have regard to the standard of living in the households from which young men have been taken to fight the country's battles. Like my hon. Friend the Member for Ince, I loathe getting up and striking a discordant note, or anything which might tend to lower the morale of the fighting men of the country in these serious times, but I would point out to the right hon. Gentleman that there is a volume of protest in the country against this proposal, and, in view of the difficulties to which it may give rise, I suggest that the right hon. Gentleman withdraw the proposal forthwith.

AIR RAID REHEARSAL.

At this point in the proceedings Mr. SPEAKER suspended the Sitting for 20 minutes in order to test the efficiency of the air-raid precautions arrangements in the Palace of Westminster. Members, officials and occupants of the Press and other Galleries thereupon Proceeded to their respective refuges.

On resuming—

4.49 P.m.

Mr. George Griffiths: I ask the Chancellor, in the interests of the country, to withdraw this Clause entirely. We miners' representatives desire that the output shall be maintained, and, in fact, increased. I cannot see in this Clause anything but a severe blow at the loyalty and enthusiasm of the miners of this country. I was in my division attending a church parade on Sunday; and at three of the pits there they were finding coal, although they had never before done anything of the kind on a Sunday since the pits were sunk. There were 800 or 900 men working in the pits that day. They were doing that in order to pull their


weight in defeating the enemy. This is not a case of working on Sunday nights, as in South Wales, where a cherished religious principle has been given away in order to allow of coal being mined on Sunday nights. In Yorkshire, they have worked on Sunday nights during the whole time that I have been in the county, which is over 40 years.
On Sunday I presented medals to two men of the British Legion. There had been a big march to church, and the men were full of loyalty to the country. At the ceremony I impressed upon them the need for every man to throw his full weight into the job, so that we might win. If I go back next Sunday the men will say, "George, what are they doing down yonder?" That is the way we talk there. I say to the Lord Privy Seal and to the Chancellor of the Exchequer that, instead of increasing output in the mining industry, this will make our fellows feel that their efforts are for the profit of the coalowners, and for nothing else. I am amazed at the profits that have been made in my coalfield during the last five months. In that time, the Yorkshire coalfield has made profits of £2,250,000. That is "shown profit," as one of my colleagues says. Even for last month, the profits are shown by the ascertainments to have been £495,000. The Clause says:
Provided that no order shall provide for increasing the said percentages by more than a further 4 per cent.
It does not say, "more than 4 per cent.," but "more than a further 4 per cent." My hon. Friend the Member for Llanelly (Mr. J. Griffiths) asked the Chancellor what is the basis of the minimum profit upon which he is prepared to put this percentage; and the Chancellor said that he did not know. They have no basis. They do not start from the minimum of no profit at all. If they did that, and said, "These pits that have had no profit can have 4 per cent.," we could understand that. But they are to be allowed an additional 4 per cent. over the profits that they have made already. We have supported this Government, almost to the detriment of some of our own political beliefs. We feel that the country is in a difficulty, and that it is up to every man in the pits to pull his full weight; and the men have agreed to do so. I said to my men the other day, "You are under conscription now." They

will say, "If we are under conscription, the coalowners must be as well." I have a great feeling in my own soul that this will help to reduce the output. I was talking the other day to a man who had only just come off work at the pit. He said, "I went to the pit the other day, feeling dead beat before I started, but I carried on because the Minister of Mines made an appeal to us over the wireless. I had to work, although I did not feel fit to do so." There are thousands of men doing that sort of thing, and this Clause will not encourage them to go on.

4.55 P.m.

The Solicitor-General (Sir William Jowitt): This is a lesson to Law Officers not to come in and listen to the discussion on parts of the Finance Bill which in no way concern them. Since I have offended against the rule, and am here, I had better say something about it. I think, first, that there has been a good deal of misapprehension about what this Clause does, and, secondly, that it is enormously important that we should carry everybody with us, because the unity which we have at present is vital. If we endanger that in any way, we endanger our whole existence. Before I say what I have in mind—which I hope and believe will give some satisfaction to hon. Members opposite—let me examine quite simply what this Clause does. It is a great mistake to think that this is any departure from the 100 per cent. Excess Profits Tax. Any Excess Profits Tax presupposes a standard. It is on profits over that standard that 100 per cent. is to be levied. There are obviously certain cases in which it is difficult to ascertain what the standard should be. Take, for instance, the simple case of a company beginning with a loss. It starts off with a loss; then, it may, for a few years, break even. It does not follow that the company has not a very good prospect for the future. In cases like that, what are you to do about fixing your standard? Clause 27 provides for that. It provides, broadly, that where you have no profits in the standard year, or where the profits in that year are so low that it would not be just to compute a standard by reference to those profits, you may apply to the Commissioners, and make out your case—you are not automatically granted this concession—and they may then give you a standard, the amount of which is not


fixed, except that the maximum may not be more than 6 per cent., or sometimes 8 per cent.

Mr. G. Griffiths: Or 10 per cent.

The Solicitor-General: Or, in certain cases, more. Clause 27 provides that it shall not exceed
six per cent., or, in the case of a company the directors whereof had a controlling interest therein, eight per cent., per annum.
That is in the Bill, as drafted.

Mr. G. Griffiths: Could I put a question?

Sir W. Jowitt: Let me just finish. It was pointed out to the Chancellor that even this standard in certain cases would create very great hardship. The matter arose, in the first instance, not in relation to coal mines, but in relation to other concerns; but if we are to make a concession for which an overwhelming case has been made, an obvious industry to be assisted is the coal industry. When you are dealing with a mine you are dealing with what may be fairly called a wasting asset. It was obviously necessary to give the Commissioners power to fix a standard for a company whose standard year would show no profit at all, or a very low profit. Faced with the present emergency, we may want mineowners to open up a new section of a coal mine which involves considerable capital expenditure. As a matter of common sense, they would have to provide for writing off so much of that capital every year. If you only allowed them to have the 6 or the 8 per cent. provided in Clause 27, it would not be possible for them to write off any part of the capital expenditure which they have to make.
I am satisfied that there is no risk of injustice to hon. Gentlemen opposite, and I know that if I could make out this case to them, they would agree. If only time is given to consider this matter, they will see the justice of this case, and I would far rather carry this by consent than try to force it through the House by putting on the Whips and having a Division, and so would the Chancellor of the Exchequer. Therefore, the Chancellor of the Exchequer, with whom I have had the opportunity of discussing this matter, has authorised me to say this. It is inevitable that in a very few months' time

he will be introducing another Finance Bill. He is quite prepared not to press this Clause in order to allow ample time for discussion, and if I may, I will place myself at the disposal of hon. Members opposite and assist in any way I can. While we do not weaken in our view that this Clause is right, fair and proper, yet we would very much rather carry it with the consent of hon. Members opposite than against their wishes. Therefore, the Chancellor authorises me to say to the House that we will not press this Clause at the present time, but hon. Members must not understand this as a weakening or faltering in our desire to have this Clause carried. Indeed, I have already said that we are, in substance, committed to it, but in order that it may be carried, as I am confident it will be, with the assent of hon. Members opposite, we will not press it now, it being understood that we reserve to ourselves the full right, after the fullest consultation with hon. Members opposite, to put it in the next Finance Bill.

5.3 P.m.

Mr. Pethick-Lawrence: I rise to thank the Solicitor-General, and the Chancellor of the Exchequer who has authorised this statement, for the concession which the Solicitor-General has just announced. I wish to say, speaking not only for myself but for all my hon. Friends who are associated with me, that it would have been a very great regret to us if any matter such as this had led to differences and a Division in this House. I am sure that the Chancellor of the Exchequer and the Solicitor-General will share our view that, even if the new Clause had been forced through by means of a Division, it would not in any way have mitigated the very serious result which would have ensued. Clearly we are looking to the miners of this country to do heroic work at great strain, and, as it has been pointed out by one of my hon. Friends, at risk to their own bodily health and safety, and it would be a very great misfortune if in their opinion, rightly or wrongly, a concession was being made which was unjustifiable. Had this been part of the original Bill, or had it been brought in on the Committee stage, there would have been plenty of time for everyone to consider the matter. If it had been brought in on the Report stage in ordinary times, no doubt my hon. Friends and I would have


examined meticulously every line of the proposal, and we could have fought it out with the Chancellor of the Exchequer. On this occasion the circumstances, as we all know, are very exceptional, and there has not been time or opportunity for this matter to be fully considered. Therefore, in view of the fact that this could not be altered at any stage in this Bill, as we propose to take the Third Reading to-day, and, as hon. Members in all parts of the House know, no Amendments can be made in the Finance Bill in another place, the Chancellor of the Exchequer has shown wisdom and courtesy—and we thank him—in coming to the only solution which meets the case. If, as the Solicitor-General hopes and believes, this Clause can be demonstrated in discussions to be thoroughly sound, I am sure that no one will be more willing to be convinced than my hon. Friends if that meets the justice of the case. It will not prejudice the Chancellor of the Exchequer in any way because the Excess Profits Tax will take a considerable time, and we are promised this in a Finance Bill at an early date. Therefore I hope that the trouble which has arisen is now fully ended.

Sir K. Wood: I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

CLAUSE 8.—(Excise licences for vehicles belonging to members of forces on leave.)

5.8 p.m.

Vice-Admiral Taylor: I beg to move, in page 5, line 37, to leave out "is," and to insert "was."
In moving this Amendment, which also stands in the name of my hon. Friend the Member for Ealing (Sir F. Sanderson) and my hon. and gallant Friend the Member for Ayr Burghs (Sir T. Moore), I should like to deal at the same time with the following Amendment on the Paper—in page 5, line 38, leave out from "1920," to "or," in line 41, and insert:
during some period during which a licence under the said Section thirteen was in force in respect of the vehicle.
The object of these Amendments is to provide officers and men returning on leave from outside this country with greater facilities for using motor transport than they have under the Clause as

it stands. I need not go in detail into this matter. It was fully discussed during the Committee stage of the Bill, but unfortunately, through no fault of my own, I was unable to be here at that time. I have read all the speeches which were made and the arguments which were put forward in opposition to the Amendment which was then put upon the Paper, and which went a good deal further than the Amendments on the Paper to-day. I realise that there are other arguments in addition to that of opening the door too widely. To open the door widely would be to the benefit of the Chanceller of the Exchequer because every additional licence that is taken out brings additional revenue to the Exchequer, but I realise that there are other considerations. Circumstances have changed materially in the last few weeks, and in the last few days.
This Amendment will give an officer or man the opportunity of getting a permit for a car which has at any time been registered in his name, notwithstanding the fact that he may have transferred the car to a member of his family or a friend or even sold it. But if such a car has at any time been registered in his name, he will be able under the Amendment to obtain a permit for the use of the car. That opens the door a little but nothing like as much as I would like to see it opened. The House is agreed on the principle that serving men who come home on leave from overseas should have as much opportunity as possible of making full use of the short time at their disposal, and motor transport is very necessary for them to get about to see their friends and enjoy themselves. We cannot do too much for them, and my Amendment would give them more facilities than they can obtain under the Clause as it stands. I am sure that the Chancellor of the Exchequer is sympathetic in this matter and that all Members of the House will wish to do everything possible on behalf of these men. I hope that in the circumstances the Chancellor of the Exchequer will not consider that I am trying to open the door too much, and that he will agree to accept the Amendment.

5.12 p.m.

Sir Frank Sanderson: I beg to second the Amendment. I do not propose to reiterate what I said during


the Committee stage. The Chancellor of the Exchequer was very generous when he listened to a number of Members at a private meeting, but on that occasion he made it quite clear that he could not accept the Amendment which was originally put down by us. I hope and firmly believe, however, that we have the sympathy of the Chancellor of the Exchequer and he will see his way to accept this very moderate Amendment.

5.13 p.m.

Sir K. Wood: My hon. and gallant Friends have put their case as they always do with strength, sincerity and persistence, and, as far as this Amendment is concerned, I recognise that they have attempted to meet the position. I felt some difficulty about the original proposition which they made, but I am pleased and prepared to accept the present Amendment, and I hope that many will have an opportunity of availing themselves of its provisions.

Vice-Admiral Taylor: I wish to express my gratitude to the Chancellor of the Exchequer for having accepted the Amendment, and I very much appreciate the courtesy he has extended to me throughout the discussion of this matter.

Amendment agreed to.

Further Amendment made: In page 5, line 38, leave out from "1920," to "or," in line 41, and insert
during some period during which a licence under the said Section thirteen was in force in respect of the vehicle."—[Vice-Admiral Taylor.]

Vice-Admiral Taylor: I beg to move, in page 6, line 3, to leave out "said."

This Amendment is consequential.

Amendment agreed to.

Further Amendment made: In page 6, line 4, after "licence," insert
in respect of the vehicle under the said Section thirteen."—[Vice-Admiral Taylor.]

CLAUSE 14.—(Modification of relief from Schedule A in case of unoccupied houses.)

5.14 p.m.

The Solicitor-General: I beg to move, in page 12, line 21, at the end, to insert

or
(b) of any tax in respect of any period in the year in question unless rent for that period was payable under a short lease.
Those who have read this Amendment may have been a little puzzled to find that there is a paragraph (b) but not a paragraph (a). The authorities of the House will put in the (a), which obviously comes after "person," in line 18.
The effect of this Amendment is to carry out a promise given during the Committee stage to make it plain that the second part of the Clause, like the first part, is to apply only to short leases.

Amendment agreed to.

CLAUSE 15.—(Taxation of excess rents of immediate lessors arising under certain short leases.)

5.16 p.m.

The Solicitor-General: I beg to move, in page 13, line 2, to leave out "himself occupying or entitled to occupy," and to insert "occupying."
For this Amendment and the following Amendment on the Paper we are indebted to the hon. Member for the Abbey Division of Westminster (Sir H. Webbe), who pointed out the possible danger of using the words in Sub-section (2) of Clause 15 "or entitled to occupy." The point of the Clause is this: If a man having, for instance, a block of flats uses some part of that block of flats for his own purpose, in order to arrive at Schedule A valuation you have not only to consider the rents he receives in respect of the parts he has let out but also what figure is appropriate to the occupation which he himself has, and you have to gross the figure up to that extent. If we use the words "himself occupying or entitled to occupy," it might bring in the case of a flat which is unoccupied, and which he is doing his best to let, but has not succeeded in letting. Therefore, in law, he is entitled to occupy that flat, but that is not what we mean; we mean that part of the premises which he is occupying. I think the words of the Amendment will give the effect which we and the House intended.

Amendment agreed to.

Further Amendment made: In page 13, line 8, leave out "or entitled to occupy."—[The Solicitor-General.]

CLAUSE 31.—(Miscellaneous amendments as to standard profits.)

5.18 p.m.

Sir K. Wood: I beg to move, in page 33, line 1, to leave out "the purpose of."
The House may remember that on the Committee stage in dealing with the Excess Profits Tax I indicated that there was need for further amendment of what I might call the personal standard which exists as an alternative to actual profits in the cases of individuals, partnerships, and director-controlled companies. As the law now stands, the personal standard consists of £750 per person, with a maximum of £3,000 when there are four or more partners or controlling directors. There are, of course, many businesses which have low profits in standard years where it would be unfair to allow only £750 per head for the services of those running the business and to take the rest in taxes. There were a number of representations made by nearly everybody about this matter when the tax was less than 100 per cent., and now the Excess Profits Tax is 100 per cent. it makes the difficulty and injustice all the more. As no deduction is allowed in computing profits for E.P.T. purposes in respect of the remuneration of proprietors who are individuals or partners, it follows that where such partners or directors are actively employed in the business the figure of £1,000 or £750 per working proprietor represents remuneration for the services of the working proprietors and return for capital employed in the business.
I will give an example. Say you have a partnership which has £20,000 capital employed in the business. The minimum standard which at present obtains is £1,500. I think everybody will agree that that is clearly inadequate for the remuneration of two partners and a return on £20,000 capital. Accordingly, I am proposing that the figure of £750 per working proprietor should be increased to £1,500. The minimum standard where a business is carried on by a body corporate will remain at £1,000 as before, but where a business is carried on by an individual or partners or a director-controlled company, then it is suggested that there

should be such sum not exceeding £6,000, which is arrived at by taking £1,500 each per working proprietor, subject to a possible further addition not exceeding £4,000 or £1,000 for each working proprietor in certain cases. In cases where the minimum standard will remain at £1,000 these will cover all the companies not director-controlled and will also cover individual proprietors who take no active part in business but employ a manager to run the business on their behalf. In such cases a company is allowed to deduct directors' remuneration, and an individual proprietor is similarly allowed to deduct the salary of his manager so that the minimum standard is not intended to cover any element in respect of remuneration.
As regards other cases, the new figure of £1,500 for each working proprietor, with a maximum of £6,000, will be allowed in all ordinary cases where the business is carried on by an individual, a partnership, or a director-controlled company. There is also the provision which permits the Commissioners of Inland Revenue, where they are satisfied that the standard of £1,500 is inadequate, to increase by an additional sum not exceeding £1,000 for each working proprietor, or £4,000 in all. The proviso I have inserted is to meet cases of hardship, which are of two particular types. The first is where the ordinary minimum standard would be inadequate in view of the nature of the business. You may have a business where it is essential that they should employ a highly qualified technical expert whose remuneration in the ordinary way would be £2,500, and if he is a director and holds more than 5 per cent. of the share capital, his remuneration will not be deducted in computing profits, and unless this proviso is inserted the standard will be only £1,500. In such circumstances the Commissioners, if satisfied, will be able to allow an additional £1,000.
The second type of case is where the normal minimum standard will he inadequate having regard to the size of business as shown by its assets. For example, there may be three partners, working proprietors, and the capital employed is, say, £50,000. In such circumstances the minimum standard, apart from the proviso I have mentioned, would be £4,500 when the standard is supposed to


represent a reasonable remuneration for partners and something by way of return on capital. The figure of £4,500 cannot be fairly regarded as adequate remuneration for partners and return on capital. Again, in that case the Commissioners, if satisfied, could direct the standard to be increased by an extra £1,000 for each working proprietor, or £3,000 in all. I hope that adequately explains the meaning of the Amendment and that it will be generally acceptable to the House.

5.27 p.m.

Mr. Pethick-Lawrence: The Chancellor has explained this Clause with considerable lucidity and I think the House is in possession of the situation. With a great deal of what he says I find myself in agreement. The object of this Amendment is to rectify certain cases of hardship, and in so far as it confines itself to that I am prepared to support it. Further than that, taking the two Amendments together, I am glad to see he has put in a definition of the working proprietor, because without that definition a good many people calling themselves working proprietors might go to their offices for one hour each week and claim large remuneration for doing so. I am perfectly satisfied that the Inland Revenue ought to have a certain amount of latitude to go beyond the standard proposed in the earlier part of the Amendment where special cases demand it. But what I am not quite satisfied about—and the Chancellor has not altogether allayed my misgivings—is in regard to the paragraph beginning:
(2) The minimum amount referred to.…
I am not quite satisfied why that should apply in all cases and why there should not be some discretion, not to allow this addition, left to the Inland Revenue. The Chancellor gave us, breezily, an example of a business with a capital of £20,000 and four working partners, and called attention to the fact that it might not earn more than £2,000. That may be the case, but suppose you take a weaker case—a business with a small amount of capital, partners, earning small salaries, who have limited ideas, but owing to the war suddenly come into increased business without any particular exertion on their part. I do not quite see why a business which is now able to earn

double or treble the remuneration in years gone by should not be subject to this Excess Profits Tax. I hope it may be possible to make some addition to that first paragraph, so that the Inland Revenue should be satisfied and that there should not be universal application to all cases, whether it was wanted or whether it was not. I would be glad if someone on the Government Benches could explain why such a provision was made. I fear there will be some cases where there will be quite needless expansions as a result of which the Inland Revenue will lose money.

5.30 p.m.

The Financial Secretary to the Treasury (Captain Crookshank): The answer is that owing to the raising of the basic rate of the Excess Profits Tax to 100 per cent. and the effect of that increase upon this class of case, it has been thought necessary to make this concession. It is a matter which will obviously have to be watched in the course of administration, and, if it is found to be too generous, steps will be taken to deal with it. However, I do not think that is likely to happen.

Amendment agreed to.

Further Amendment made:

In page 33, line 2, leave out from "1939," to the end of line 16, and insert:
there shall be substituted the following Sub-section—
'(2) The minimum amount referred to in Sub-section (1) of this Section is one thousand pounds, or, in the case of a trade or business carried on by a single individual, or by a partnership, or by a company the directors whereof have a controlling interest therein, such greater sum, not exceeding six thousand pounds, as is arrived at by allowing one thousand five hundred pounds for each working proprietor in the trade or business:
Provided that if, in the case of a trade or business carried on by a single individual, a partnership or such a company as aforesaid, the Commissioners, having regard to the nature of the business and the size of the business as shown by the value of the assets employed therein, are satisfied that the said greater sum is inadequate, they may, if they think fit, direct that there shall be allowed in respect of not more than four working proprietors such additional sum, not exceeding one thousand pounds for each individual working proprietor or four thousand pounds in the aggregate, as may be specified in the direction.
In this Sub-section—

(a) the expression "working proprietor" means a proprietor who has, during more


than one half of the chargeable accounting period in question, worked full time in the actual management or conduct of the trade or business;
(b) the expression "proprietor" means, in the case of a trade or business carried on by a partnership, a partner therein, and, in the case of a company, any director thereof owning more than one-twentieth of the share capital of the company."—[Sir K. Wood.]

FIFTH SCHEDULE.—(Provisions as to Excess Profits Tax and National Defence Contribution in the case of interconnected companies.)

Amendment made, in page 84, line 8, leave out from "sum" to the end of line 11, and insert:
as might be allowed in relation to the principal company under the provisions of Sub-section (2) of Section thirteen of the Finance (No. 2) Act, 1939."—[Sir K. Wood.]

Motion made, and Question proposed, "That the Bill be now read the Third time."

5.33 P.m.

Mr. Pethick-Lawrence: I do not think we can, even in these days, allow the Third Reading of the Finance Bill of the year to pass sub silentio. I do not propose to take up a great amount of time in dealing with it. There is no doubt that the provisions of the Bill make very considerable inroads upon the resources of our people. When the Budget was introduced, and when the Second Reading of the Bill was being discussed in this House, the House showed unmistakably that, heavy as the burdens w ere which the Bill was imposing, they would be accepted, and so far from being considered too heavy the House realised that in their aggregate they were inadequate. If the House thought them to be inadequate at a time when the war was still in its quiescent stage and when our gallant Allies across the Channel were still in the full vigour of their military preparations, how much more are we forced to realise that they are inadequate to-day after the events of the last two months. Quite clearly, great as are the burdens which the Bill imposes on our people, it cannot be the last word with regard to the financial provisions of 1940–41. The Chancellor of the Exchequer has told us that that is the case. There must be grave sacrifices of a financial character made by the country. They are grave as imposed by the Bill,

and they will be graver still we fear when the Chancellor of the Exchequer gives us his whole mind with regard to the finances of the year. But, viewed from the point of view of the whole burden which the country is bearing, these financial sacrifices are tiny and almost insignificant. The country will bear them gladly, almost willingly, knowing that they are absolutely necessary for the tremendous task which is in front of us.
In the larger perspective of the immense sacrifices which have to be borne in all fields, there will be little opposition in this House or in the country to the financial sacrifices which must be imposed not on one but on all sections of the community; with this one exception, that additional burdens placed on the very poor, those who are already below the standard set by Sir John Orr, are burdens which will not benefit the country in any way. On the contrary, they would be injurious to the country, because they would lower the morale of our people. With that exception I believe it is the general feeling of the House that all sections of the community will bear these burdens in order to face the tremendous problem in front of us. The regard for which these sacrifices are being made is one which cannot be over-estimated. In the days gone by our forefathers secured for us a "pearl of great price," the freedom of our people and the liberty to act, to work, and even to think, in the way that they desired. That pearl of great price is in jeopardy to-day. We dare not allow it to be filched from us. It is not merely our own democratic institutions, not merely the lives of individuals who sit in this Chamber or who are our comrades and friends in the country; we stand for the integrity of this country, and the sacrifices we have to make are for that integrity and for the fundamental basis of human civilisation.

5.40 p.m.

Mr. Graham White: If the importance of this Bill was measured by the length of time of the discussions in this House, it might be judged to be a Bill of small consequence. That is not the case. It imposes imposts of an irksome character and, in fact, is the most formidable instrument for the transfer of private means to the public Exchequer that has ever been passed in this House. The right hon. Member for


East Edinburgh (Mr. Pethick-Lawrence) has just said that when the Budget was introduced it was criticised, and justly criticised, as being a most inadequate measure of the nation's will to carry on the war and mobilise all our resources for the prosecution of the war. We know now that this Finance Bill is an interim Measure and must be followed by supplementary financial measures in the near future which will be related to the maximum effort the country or the Government is determined to make. There is one lesson which stands out from the way in which the Bill has been received in the House and in the country. It is this: that the most revolutionary financial proposals can now be accepted by the whole country, not only without opposition but even in a spirit of willing co-operation. It is now quite clear that the Government are not under the necessity in future of entering into any elaborate process of bargaining with regard to interest rates or the duration of loans. The duty of the Government now is to make up their minds what they think is necessary for the prosecution of the war and the satisfaction of the nation's needs and to come down to the House and explain them. On these terms, whatever may be the proposal, it will be accepted. I agree with the exception made by the right hon. Member. It would be futile to try and place burdens on those who are not able to face them, and we do not expect the Government to make any attempt of that kind.
I do not know whether there are any people who are under the belief that the march of events in recent weeks and the changes in the character of the war lead to any less vigorous need for watching the finances of the country. The changes in the character of the war and the locality in which it is to be fought may lead not to a diminution in the national expenditure and financial effort, but to a change in the direction of that effort and the way in which some of the money may have to be expended. If we have to remain, possibly for years, as a beleaguered fortress, we shall have to adapt our finances to that situation. We have not yet reached our maximum production or anything like it. If our national expenditure is running below what we anticipated, if it is running at a level which is less than our maximum effort and much

less than we are determined to make it, it is, nevertheless, a very heavy expenditure indeed in relation to the amount of consumable goods in this country which remain for the civil population. It is clear that there is now every need for every citizen to regard his own consumption in the most minute detail. Those who live in a beleaguered fortress cannot allow themselves any latitude in expenditure. I should not regard the provisions of the Bill as representing what is necessary to reduce individual consumption.
A question has been raised recently in the House with regard to joy riding, excursions, dog racing and the like. These are not matters which are to be decided entirely within the Clauses of this or any other Finance Bill. They are matters on which the conscience of each citizen should be brought into play, and each citizen should examine them in the light of what he considers to be his duty. There are at the present time some signs of a revolutionary nature in the financial make-up of the country. Some of those signs are very encouraging. I do not remember any Chancellor of the Exchequer in the past having been called upon to state clearly, for the convenience of prospective lenders, the terms on which they could lend money to the Government free of interest. I do not remember there having been any pronounced demand for facilities of that kind in connection with any other Budget. The right hon. Gentleman explained that the process by which such loans could be made was simple and easy and open to anybody who found himself in a position to enter into a transaction of that kind.
This leads me to say that I have observed that the voluntary savings method, as apart from the interest-free loans method, is making satisfactory progress; but from the point of view of avoiding the process of inflation which must follow inevitably from a reduction in the amount of consumable goods and from the great transfer of spending power which has taken place between some members of the community and others—the immense spending power, for example, which has been conferred upon members of the engineering industry—which, if it were to be let loose on the reduced volume of consumable goods, would speedily lead to an increasingly awkward situation, there is still scope for increased momentum and volume in the voluntary savings cam-


paign. That is one safeguard against inflation, but clearly, the situation is one that calls for the strictest personal discipline in expenditure and consumption by all those who have any money which they are free to spend above that necessary for the preservation of health and a normal standard of life.
I do not wish to trespass further on the time of the House, but those who can help the day-to-day finances of the country in the ways I have endeavoured to indicate will certainly be doing something to sustain the State and shorten the war. This island of ours is now an outpost of civilisation. Probably it is the remaining key in Europe which still maintains the possibility of the survival in Europe of any reasonable standard of good life. That is being realised not only throughout Europe, but the world over; and in these matters of finance, we must not fall short of our full duty at the present time.

5.49 P.m.

Colonel Sir George Courthope: There is one matter, which may seem a small one after the very lofty attitude of the speeches to which we have just listened, to which I must refer in order to put myself, and if I may say so, also my right hon. Friend the Chancellor of the Exchequer, right with the Forestry Commission, which I represent in the House, and with the representatives outside of the woodland owners of Great Britain. During the Second Reading Debate, I referred to the curious anomaly which had arisen with regard to the taxation of woodlands, and I pointed out that this was standing in the way of the easy and ready acquisition of standing timber in Great Britain for purposes of the war. From that point of view, I asked the Chancellor to consider the matter very carefully in order, not to remove a burden or relieve a hardship, but to clear away an obstacle to one item of the war effort. I will explain the nature of that anomaly.
As the law is at present, it happens that standing woodlands are capital for purposes of Death Duties and become liable to payment of those Duties when they are felled, and not when they pass at death. The timber that is felled is also liable to the Excess Profits Tax. It may well be that on an estate which would not normally sell any timber, but

which is now, for war purposes, asked to sell a great deal, the whole of the timber felled might appear to be liable to Excess Profits Tax as income and also liable to deferred Death Duties as capital. There is a number of cases where there is no doubt whatever that the liability to the Crown for taxation would be in excess of the total price which would be paid for the timber if it were acquired, either voluntarily or compulsorily, for purposes of the war. Obviously, that is a ludicrous position which has to be dealt with.
At the time of the Second Reading of this Bill, it appeared to the organisations representing woodland owners and to the Forestry Commission that this obstacle could not be removed without an Amendment being made to the Finance Bill. My object in speaking to-day is to say that this matter has been very carefully studied. The subject of the treatment of woodlands for purposes of the Excess Profits Tax is under careful examination by the Board of Inland Revenue, and I am absolutely satisfied that the matter is one that can be adequately dealt with by administration and without its being necessary to amend the law. Therefore, I want my friends outside to feel satisfied that the Chancellor of the Exchequer, the Board of Inland Revenue and I have not in any way neglected their interests by reason of the fact that the Finance Bill is being given a Third Reading today without having been amended in this respect.

5.53 P.m.

Sir K. Wood: I should like to make a few remarks before the Bill is given a Third Reading. I confess that when I approached the Bill in the first instance, I was in doubt as to whether I ought to proceed with the whole of its Clauses, and I was also confronted with the fact that the situation had fundamentally changed between the Budget Statement of 23rd April and the date at the end of May when the Finance Bill was ready. However, I felt that a good deal of hard work had been involved in the Bill and that to jettison at any rate a considerable portion of the Bill would have meant the loss of a good deal of that careful and most useful work. In those circumstances, after consulting right hon. Gentlemen opposite and hon. Members in other parts of the House, I decided to proceed, because I was assured that facilities would


be given to expedite the passage of the Bill which would otherwise have been an onerous, long and difficult undertaking.
The Bill has now reached its Third Reading, and the only matters on which I desire to comment are those which relate to the Excess Profits Tax, which has received the greatest consideration from the Committee and the House. It is right to emphasise that it was proper that that examination should have been given, because with a tax of this kind, which nobody can claim to be scientific in its application, it is essential that the basis for the charge should be as equitable as the exigencies of the Revenue permit. Undoubtedly, with the very important change which we have made during the course of the progress of the Bill involving Excess Profits Tax at 100 per cent., it is obvious that hard and difficult cases cannot be avoided, and I am afraid they will be bound to occur, but I think that, with the assistance of hon. Members in all parts of the House, we have gone a long way to meet the representations that were made, both inside and outside the House, at any rate with regard to the hardest cases. I want to assure all those who are naturally interested in this tax, whether they be great concerns and industries or small ones, that we shall continue to watch the operation of the tax, and of course, there will be opportunities for amendment and discussion in subsequent Finance Bills.
I should like also to add a word to what was said by my right hon. and learned Friend the Solicitor-General this afternoon with regard to the Amendment which I withdrew, having regard to the representations that were made to me by hon. Members opposite. I must say that I feel there was a complete misapprehension of the whole position. The chief reason which actuated me in withdrawing the Amendment was the desire to maintain agreement and the belief that there was a misapprehension of the position. I have no doubt that, with the help of the Solicitor-General, we shall be able to explain matters sufficiently to hon. Members opposite, so that we shall be able to proceed, as I intended to proceed, in the next Finance Bill, to meet the very critical situation that arises as far as certain companies are concerned. If I had been aware that there was any misapprehension on this matter, I should

have been only too willing to meet hon. Members who were so concerned about this during this afternoon. The last thing I want to see at this hour is a division of opinion or any statements in the country concerning the provisions of this Bill which would be quite erroneous. It is only fair to say to the House that, in the case of those concerns, such as copper and coal, which are making great efforts at this time in the national interest, it is my intention to proceed.
I should like to make one or two remarks, as other hon. Members have done, about the future and about our taxation generally. There is only one thing on which I disagree with the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence). He referred to the present burdens of taxation as tiny. That is not how I would describe them.

Mr. Pethick-Lawrence: Perhaps I may correct the right hon. Gentleman as to what I said. I said that great as those burdens are and still heavier as they are expected to become, they are tiny in comparison with the terrific sacrifices that are being made in other directions.

Sir K. Wood: I entirely agree in that respect with the right hon. Gentleman. It is a fact that at this time taxation does weigh very heavily upon great masses of the community. That is why I indicated to the House, in the Second Reading Debate, that I felt there must be some time for a measure of adjustment before other taxation has to be faced. I wish to elaborate the matter further this evening by simply adding that a second Budget and a second Finance Bill must be regarded by this House and the country as inevitable. We have to face it together, as the right hon. Gentleman said, and, so far as I am concerned, we must see that all sections of the community shall bear their fair share of responsibility for the burdens which face us, without which, of course, victory cannot be achieved.
I was grateful to the hon. Member for East Birkenhead (Mr. White) for what he said in regard to the necessity which still exists, notwithstanding our very heavy commitments, for careful finance and watching, so far as we can, its operations. That should not be lost sight of, because, in the end, we may have to fall back on the weapon of finance much more than


people imagine at the present time. This is certainly not a moment to give up any methods of supervision which do not impose vexatious restrictions, or delay, or anything of that kind. I desire to thank the House for what has been said about my appeal, yesterday, for loans without interest. Already there has been considerable response in that connection, and I have received some of the most touching letters, during the last few days, from rich and poor alike, who have sent gifts at a time of crisis. Many organisations, as the hon. Member said, are also responding.
In asking the House to pass the Third Reading of this Bill, I would say that in this momentous struggle the chief function of finance is to serve the State. I feel that what is required must be, and will be, provided to the utmost limit of our resources, and that at the present time we must throw those resources into the scale against the enemy whatever the additional burdens involved may be. I agree with what has been said to-day, and I am sure it is weighing on the minds of everyone, that, after all, the sacrifice of money and property must be regarded as trifling compared with the sacrifice of life and limb which so many of our countrymen have been making and will have to be called upon to make.

Question, "That the Bill be now read the Third time," put, and agreed to.

Bill read the Third time, and passed.

Orders of the Day — REMISSION OF RATES (LONDON) BILL.

Considered in Committee.

[Sir DENNIS HERBERT in th Chair.]

CLAUSE 1.—(Extension to London of power to reduce or remit rates.)

The following Amendment stood upon the Order Paper in the names of Sir H. WILLIAMS and other hon. Members:

In page 1 line 14, at the end, to add:
(2) Section seven of the Representation of the People Act, 1867, is hereby repealed so far as it relates to the Administrative County of London.

The Chairman: I do not propose to call this, the only Amendment which is on the Order Paper, because it is outside the scope of the Bill.

Clause ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Bill reported, without Amendment; read the Third time, and passed.

The remaining Orders were read, and postponed.

Orders of the Day — ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Mr. Grimston.]

Adjourned accordingly at Seven Minutes after Six o'Clock